PayScale Wins $100M Investment from Warburg Pincus

PayScale, a company that offers software-as-a-service-based (SaaS-based) salary comparison software, has received a majority investment of up to $100 million from an affiliate of private equity investment firm Warburg Pincus. PayScale said it will use the funds to develop new HR data and software solutions and add employees to its go-to-market and product development teams.

“By leveraging Warburg Pincus’ expertise, experience and growth capital, we will be able to enhance our product offerings and accelerate our growth,” Mike Metzger, president and CEO of PayScale, said in a prepared statement.

Justin Sadrian, managing director of Warburg Pincus, noted the investment is designed to fund PayScale’s growth initiatives.

“At a time when businesses increasingly seek sophisticated analytics about employee compensation, PayScale’s offerings enable its customers to make better, faster and smarter decisions related to attracting and retaining the talent to power their organizations in a cost-effective manner,” Sadrian said.

With PayScale, people can take a salary comparison survey to determine how their compensation packages stack up against others’ in their respective fields. PayScale uses a MarketMatch algorithm that collects data from those who complete salary surveys, identifies factors that impact the salaries of specific jobs and makes personalized salary predictions.

International Data Corporation (IDC) expects the human capital management software market to reach $11 billion by 2016. Meanwhile, PayScale’s revenue rose 43 percent between October 2012 and October 2013.