In my coverage of the SME opportunities, one that impressed me much is PayCycle.
PayCycle is addressing the 5.5 Million small businesses with employees fewer than 25 people, with a payroll management service including all sorts of taxes and deductions. This is essentially the same space as Paychex, ADP, and Intuit, only going after the very small businesses which fall below the radar of these larger companies. PayCycle has 18,500 customers, did $4 Million is sales last year, expecting to double this year, and growing steadily by 100% year-over-year each quarter.
I have known the CEO, Jim Heeger, for a long time. He was a very successful, long-term executive at Intuit, and then our paths crossed when we were both doing EIRs at NEA towards end 2000 / early 2001. The very fact that Jim joined the company, is testimony to the fact that they know EXACTLY what they are doing, a luxury seldom experienced in venture circles.
Between Intuit and PayCycle, Jim took a detour and cleaned up one of Stewart Alsop’s digital photo sharing companies, and sold it to Adobe. This product has since become Adobe’s photo album offering. Jim also ran Adobe’s Creative Professionals business unit for a few years and achieved exceptional growth.
The rest of PayCycle’s team is just as impressive and pertinent – they are basically Jim’s former team from Intuit.
This is a Market I would bet on. This is a Team I would bet on.
As for the solution itself, from what I have heard, they have really really happy customers, and the proof is truly in the pudding: 18,500 customers don’t just happen, unless there is a good solution in place.