Personio, the German HR and recruiting platform, has raised $40 million in a Series B funding. Leading the round is London-based Index Ventures, with participation from existing investors Northzone and Rocket Internet’s Global Founders.

Founded in 2015, Munich-based Personio has set out to build a “HR operating system” for small and medium-sized companies (SMEs) ranging from 10 and 2,000 employees. The cloud-based software is designed to power all of a company’s HR and recruiting processes, either via the product’s own core functionality or through its ability to integrate with third-party software.

“We believe in the benefit of a holistic HR solution that covers the entire employee life-cycle, while its functionalities need to adapt to individual customer requirements and processes,” Personio co-founder and CEO Hanno Renner tells me.

“That being said, we distinguish between the bread-and-butter HR activities which every company needs to do (e.g. recruiting, on boarding, time off management, payroll etc.) and those that are either industry-specific or rather nice-to-haves”.

Examples of the latter include hardware-based time tracking, and employee engagement, respectively. “We focus our efforts on providing a best-in-class experience for what we consider bread-and-butter HR,” adds Renner. “For more specific requirements, we let our customers choose from a growing number of integrated vertical solutions based on their needs. Data will be synced so Personio acts as the system of record for all HR information and information only needs to be entered once”.

German HR and recruiting platform Personio raises $40M Series B led by Index Personio product example

In addition to “out of the box” third-party software integrations, Personio’s claim to offer a HR operating system is backed up by the company’s open API, which is designed to cover various use cases where accessing data that is stored in Personio can add further value to customers. This includes building something as simple as a Slack bot using Personio data, to connecting Personio to a company’s data-warehouse or deeper integrations with internal systems.

More broadly, Renner says this holistic approach, coupled with Personio’s workflow automation that aims to cut down on time wasted on repetitive tasks, is not only resonating with HR managers and recruiters who typically use the product for several hours per day, but is also finding use with managers, executives and other employees. The end result is that HR and recruitment processes can become much more distributed across a company.

To that end, Personio says its Series B funding will be used to help the company attempt to become Europe’s leading provider of human resources software for SMEs. It boasts more than 1,000 clients in 35 countries, seeing over 150,000 employees and several hundred thousand applicants currently being managed within Personio.

“We believe that now is the right timing to actively expand into further regions and the funding as well as Index expertise will certainly help making that move successful,” adds the Personio CEO. “Apart from that, we consider ourselves a product-driven company and hence want to continue to strongly invest into building the best product for our customers which will mean significantly growing our product & engineering team and potentially even opening a new office to facilitate hiring”.