Do you know what’s happening inside your company? Who’s contributing, who’s satisfied, who could be promoted, and who deserves a bit more money to deter competition? The common answer is often, I have no idea. Building on that reality, Factorial has tripled its turnover in recent years.
Factorial HR began in 2016 when Jordi Romero, Pau Ramón, and Bernat Farrero—three computer engineers with startup experience—saw that the human resources department was the one area most lacking in knowledge and technology. As Romero says, “Ultimately, managing people becomes the key to any business: having good talent, developing it, knowing how to reward it, and retaining it.”
From that insight, small and medium-sized companies were encouraged to adopt software that would automate much of HR management. “With this automation, people can be more productive, reduce costs, handle more work, increase satisfaction, and grow,” the founders noted. They also realized they could generate a wealth of data about people and use that information to help entrepreneurs make smarter decisions [Citation: Factorial HR].
In 2022, the forecast suggested turnover would triple again from last year’s 10 million euros. Jordi Romero, the CEO of this Catalan venture, emphasized that the biggest challenge ahead is properly managing workforce growth while scaling operations. This perspective reflects a broader trend in HR tech as companies expand and seek scalable solutions [Citation: Factorial HR].
Romero elaborates on the current focus: “Our main concern right now is the scale we have. We grew from 40 employees to 100, then to 300, and now to 700. This relentless expansion brings numerous organizational challenges. The market we operate in is vast, with more than 10 million companies we can assist. The product is strong, and there are substantial investors behind it. The real challenge is to manage and optimize this volume as it grows.”
Factorial has completed four rounds of financing in six years: the first round raised 500,000 euros, the second 2.8 million euros, the third 15 million euros, and the fourth 67 million euros. The company serves more than 5,000 active small and medium-sized business customers, including “companies with up to 1,000 employees” according to Romero [Citation: Factorial HR].
In the early days, the company experimented with a freemium model, reaching out to more than 60,000 companies. Features were offered for free in exchange for signing up, with payroll services among the paid offerings. By 2019, Factorial had refined its business model, dropping the free sign-ups and focusing on a monthly subscription approach that emphasized paid customers rather than counting free sign-ups [Citation: Factorial HR].
According to Romero, the first three years were devoted to building the product and testing multiple business models. One approach did not work, but the team eventually landed on a software and reservation system that charges an annual or monthly subscription, plus a small fee per employee on the platform. He explains that growth and costs rise together: if a company grows, Factorial grows with it; if a company is small, the platform remains affordable. The result is a flexible model that has powered substantial expansion [Citation: Factorial HR].
The group operates across several regions, including Spain, Italy, Portugal, France, Germany, the United Kingdom, Mexico, Brazil, Chile, Argentina, and the United States. The headquarters are in Barcelona, home to more than 400 employees. Additional offices are located in Mexico City, Sao Paulo for Brazil, and Utah to serve the United States market. This geographic spread reflects Factorial’s ambition to serve diverse markets with HR automation and data-driven insights [Citation: Factorial HR].