Atlas Technology Solutions, a Chicago-based employee management software firm, may consider acquisitions after raising up to USD 200m in a Series B round last week, CEO and founder Rick Hammell said.
The round, financed by Sixth Street Capital, will allow the company to invest further in technology, which could entail M&A, he added.
An acquisition could also help achieve the goal of expanding its sales and marketing in the 163 countries where it operates, Hammell said. He did not disclose details about potential target size nor an M&A timeline.
The company does not disclose revenue, but Hammell said it doubled in size between 2021 and 2022 and has been profitable. He cautioned, however, that anticipated future investments could put the company in the red.
The business was established in 2015 under the name Elements Global Services and rebranded earlier this year. In 2020, it raised USD 20m from Guidepost Growth.
“Look at what we did with USD 20m,” the CEO said. “We have been on par with, if not ahead of, all of our competitors who raised hundreds of millions of dollars. Can you imagine what we’re going to be able to do with USD 200m?”
Sixth Street now holds a minority stake in Atlas and managing director Nari Ansari joined the company’s six-person board of directors. Hammell said the company will be adding a seventh board member within the next month.
According to Hammell, Ansari “really knows our industry and has spoken to all our competitors and feels we have the right puzzle pieces to be successful. His experience in PE and HR technology is going to be vital to our overall strategy.”
Atlas helps companies that are looking to hire or retain talent in countries where they do not have a legal entity. Atlas’ system, which costs each employee a monthly fee, enables these companies to operate quicker and more cheaply than if they were to set up shop abroad, Hammell explained.
In China, for example, “it can take up to 18 months to set up an entity and costs USD 250,000 in capital,” Hammell continued. “That time frame can be detrimental to an organization trying to test a new market. We can hire an employee in three to five business days to test that market.”
He explained the difference between Atlas and its competitors is that it does not outsource any tasks, a central reason why he launched the business. He noted that he previously worked in an HR role for a company that outsourced talent in Saudi Arabia, Singapore, and Japan, which was a “bad experience” for him.
“When I set up the business, I sold my house, and I invested everything in setting up entities around the world. Almost eight years later, that’s still the direction that our competitors want to take, but because that’s not where they started, it’s a lot more challenging for them to do that. We’re still the only ones in our industry who are 100 percent direct,” Hammell said.
According to the executive, Atlas’ biggest competitors are Remote, Globalization Partners, Velocity Global, Deel and Omni.
Atlas currently has 375 employees and is looking to hire 500 more, Hammell said.
He acknowledged that one future option for Atlas is to “grow to a point that we can’t grow anymore and find a strategic partner to acquire us.” Alternately, the company could seek an IPO at that juncture, he added.
He said, however, that he thinks Atlas is still working on the “building blocks of those paths before we get to the fork in the road where we have to make that decision.”
Baird served as exclusive placement agent and Cooley acted as legal advisor to Atlas on the recent raise.
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