Factorial, the Barcelona-based HR software startup targeting SMBs, is in negotiations to raise approximately $200 million at a $2 billion valuation, according to Bloomberg (March 9, 2026). This funding round would double the valuation achieved when the company reached unicorn status in 2022.
A sustained growth trajectory
Founded in 2016 by Jordi Romero, Bernat Farrero, and Pau Ramon Revilla, Factorial develops a SaaS platform that centralizes payroll, recruitment, leave management, and training for small and medium enterprises. The company reached $100 million in annual recurring revenue (ARR) in September 2025, a milestone confirming the commercial traction of its business model.
The company had already raised $120 million in Series C in 2022, reaching a $1 billion valuation at the time. In 2025, General Catalyst injected an additional $80 million to accelerate European expansion. If the new round materializes, Factorial would become Spain’s most valued startup, according to TechFundingNews.
What this means for European businesses
A strong signal for European HR-tech. The HR software market is experiencing post-pandemic acceleration, driven by hybrid work and automation demand. Factorial fits into a trend where SMBs seek alternatives to traditional HRIS solutions (SAP SuccessFactors, Oracle HCM) considered too heavy and expensive for organizations with 50-500 employees.
Increased competitive pressure in the SMB segment. With $200 million in fresh funding, Factorial would have the means to accelerate in French, German, and Italian markets — territories where local publishers (BambooHR, Personio, Access Group) still dominate. For SMB IT directors and CFOs, this means more choices and potentially more competitive offers in the short term.
The ERP-HR convergence continues. Factorial no longer limits itself to leave management: payroll, recruitment, training, expense reports. The boundary between HRIS and ERP is blurring. Traditional ERP vendors that neglect the HR component risk seeing their SMB clients migrate to vertical platforms like Factorial, Personio, or Deel, which cover end-to-end HR workflows.
What to watch
Negotiations are still ongoing and nothing is signed. The final amount and valuation could evolve. Note that the HR-tech sector is experiencing intense competitive tensions: Deel and Rippling are engaged in a legal conflict involving alleged industrial espionage and defamation, which is reshuffling the cards for European players like Factorial.
For companies currently evaluating an HRIS, caution remains advisable: wait for confirmation of the funding round before betting on a product roadmap that depends on this financing. Concrete announcements should come in the coming weeks.
To explore the ERP-HR landscape in Europe further, consult our complete guide to choosing your ERP in 2026 and our comparison of ERPs for SMBs.
