Sólides raises BRL 530 million with Warburg Pincus Feb 17, 2022
- One of the largest investments made to an HRTech – a technology company focused on HR management – in Latin America
- Sólides is considered the only all-in-one solution for small and medium-sized companies
Sólides, Brazil's leading HRTech for the small and medium-sized companies market, today announced an investment of R$530 million (US$100 million) in a Series B round led by Warburg Pincus, a leading global growth investor. This is one of the largest capital raises by a technology company focused on human resources management in Latin America to-date.
The investment strengthens Sólides as a complete solution for small and mid-size enterprises (“SMEs”), with innovations for human resources (“HR”) subsystems and the expansion of financial services and corporate education for the employees of its 12,000 customers, spread across the country. The capital will also give more breath to SoLAB - the Artificial Intelligence and Innovation Laboratory created by Sólides.
“We aim to work with every SME in this country and revolutionize people management through our technology, helping human resources teams of these companies to be more strategic, profitable and growth oriented,” says Mônica Hauck, co-CEO and co-founder of Sólides. “Small business professionals do not have the time nor resources to invest in software that serves only part of the process and generates complexity on a daily basis. By using our complete solution, our customers reduce the time to hire by up to 70%, the turnover rate by up to 50% and increase the productivity of their teams by 30%. In addition, they optimize at 20 times the cost they would have if they adopted vertical solutions, such as ATS (recruitment and selection tool) that does not guarantee the end-to-end journey. From the beginning, we developed our technology as a platform in order to meet all the HR needs of small and medium-sized companies. This changes the business results and breaks the paradigm of people management in Brazil, which is typically only associated with large organizations."
Sólides' growth strategy includes the acquisition of companies specialized in different areas of HR management – a move that positions the company as a hub in this market. “We want to be leaders in the consolidation movement of HRTechs. The partnership with Warburg Pincus will be fundamental to our leadership by supporting our acquisitions and expanding our service offerings,” says Alessandro Garcia, co-CEO and co-founder of Sólides.
Sólides' addressable market is estimated at around R$17 billion. There are currently 600 thousand companies in Brazil with 30 to 1000 employees, mainly outside the Rio-São Paulo axis, where Sólides also has a strong presence.
Warburg Pincus believes that SMEs will further demand technology-based HR solutions, in line with a secular trend towards business digitization. “The adoption of technology by HRs is still incipient among SMEs and Sólides delivers a complete solution suited to the needs of its customers. In addition to addressing mission critical functions for customers, which leads to high retention levels, the platform enables the offering of benefits and financial products which are highly demanded by managers and employees,” says Bruno Maimone, Principal, Warburg Pincus in Brazil.
Warburg Pincus has extensive industry experience, with investments in five HRTechs in the US, Europe, and China. “Sólides is positioned to be a leading platform in Brazil, following the same trends in management software adoption that we have seen in mature markets and capturing strong growth, despite macroeconomic challenges. Digitization is a path of no return," added Bruno Maimone. Sólides is the fourth technology-based investment by Warburg Pincus in Brazil, which demonstrates the firm’s position as one of the top technology growth equity investors,
This is the second round of investments by Sólides. The first round – of BRL 14 million – was carried out by DGF Investimentos in 2019 and paved the way for the company to compete for leadership in the national market.
Sólides, Brazil's leading HRTech for SMEs, offers the only all-in-one platform and an exclusive methodology that helps SMEs to grow, and continues to transform people management through innovation and technology. Its main objective is to facilitate the way companies attract, develop and retain their talent, reducing turnover and increasing their customers' competitive advantages. In a single platform, it offers the necessary functionalities for HR processes: Talent Attraction and Management, Development and Performance, Engagement and Retention, Corporate Education, Benefits and Financial Services. It also maintains the largest HR education portal in Latin America, the RH Portal. In the last three years, the company has grown 5 times and the number of customers has tripled, reaching 12,000 companies and more than 4 million active lives managed through its platform, and emerging as the segment leader in the Scale Ups ecosystem in Brazil.
About Warburg Pincus
Warburg Pincus LLC is a leading global growth investor. With more than US$73 billion in assets under management and an active portfolio of more than 235 companies, highly diversified by stage, sector and geography, Warburg Pincus is an experienced partner for management teams looking to build lasting, sustainable companies. Founded in 1966, Warburg Pincus has invested more than $100 billion in over 1,000 companies in more than 40 countries and has supported more than 200 IPOs worldwide. Warburg Pincus has invested more than $25 billion in over 360 technology companies since inception. The firm has been present in Brazil for over 10 years, having supported large companies such as Petz, Sequoia Logística, Grupo GPS, Eleva Educação, Superlógica, Take Blip and Blu.