Weekly Update #155: The Zenefits Saga
HR software startup Zenefits recently restructured their company and slashed their valuation by over 50%, according to Fortune. The company was previously valued at $4.5 billion before the company went through a wave of turmoil, including:
- The resigning of their founder and CEO, Parker Conrad
- Allegedly using a tech "bot" to allow employees to fake the completion of required online insurance courses
- Laying off 250 employees
Is there good news ahead? Fortunately, light is at the end of the tunnel. As a result of the aforementioned changes, Zenefits has positively done the following:
- Promoted David Sacks, a seasoned Silicon Valley tech exec, to CEO. Sacks was previously COO at PayPal and then founded Yammer, which sold to Microsoft for $1.2B.
- Adding three senior board members, including PayPal founder Peter Thiel.
- The valuation slash will come with a "release of claims against the company." In light of recent news, some investors had threatened to sue Zenefits over "regulatory impropriety".
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