After split, PC, printer arm keeps most debt
Zenefits has opened yet another office in Arizona, the latest ofmany signs that the startup is on a growth streak unparalleled in the subscription software business.
San Francisco-based Zenefits announced Tuesday it has signed a 10-year lease for a five-story, 135,000-square-foot office
HP Inc., the personal computer and printer company that will emerge from the split of Hewlett-Packard, is liable for most of the debt of the parent company, regulatory filings show.
HP Enterprise, the other post-split entity that will focus on corporate computers and services, had total debt of $1.45 billion as of April 30, according to a filing with the U.S. Securities and Exchange Commission Wednesday. That’s just 6.8 percent of HewlettPackard’s $21.06 billion in long-term and short-term borrowings, according to data compiled by Bloomberg. The data suggests that the majority of debt obligations is attributable to HP Inc., according to the filing.
The final debt distribution between the two new companies hasn’t been finalized. HewlettPackard said it may transfer some balance sheet items to HP Enterprise after the split.
“It’s great for supporting the workers,” said Shelby Clark, CEO of Peers.org, a group dedicated to supporting workers for new on-demand startups. “That said, I don’t think that it’s the answer for everyone. I don’t think it’s going to be how the problem is solved. The No. 1 consideration of why people choose the job that they did is the flexibility, and that can really go away as they become employees. I don’t think it’s going to be how the problem is solved.” in Tempe, Arizona, that will house 1,000 employees. This is the company’s second footprint in Arizona; in November, it opened an office in Scottsdale that now houses 600 employees and can hold twice that. Zenefits’ arrival in Arizona last year was the largest expansion from a California-based tech company into the greater Phoenix region since PayPal in 2010.
Arizona may seem like an odd choice for a tech firm created in Silicon Valley, but the Bay Area’s real estate market wasn’t suitable for Zenefits’ quick growth. Buildings are larger, cheaper and easier to come by in Arizona, allowing the company to invest in marketing, hiring and developing, rather than pricy leases.
“With this fast growth, we need more people to join our team– and a place to put them,” Parker Conrad, CEO and co-founder of Zenefits, said in a written statement.
The company employs more than 1,000, up from 15 in January 2014.
Founded in 2013, Zenefits makes human resources software for businesses to manage health insurance, payroll, maternity leave, 401(k) plans and other services for their employees. It gives the software away for free and makes money by contracting with businesses to become their health insurance broker — the middleman between businesses and health care providers such as Anthem Blue Cross— and getting paid a commission.
In May, the company announced that it had raised $500 million at a $4.5 billion valuation, for a total of $584 million in venture financing.
— Heather Somerville