In just six years software firm Personio has become one of Europe's most valuable start-ups, valued at $6.3 billion.
But CEO Hanno Renner remembers a time when money was tight for the company.
Speaking to CNBC, Renner recalled how the business had just 200 euros ($226) left in the company bank account before it received its first real funding.
Renner co-founded Personio in Munich, Germany, in 2015 with Roman Schumacher, Arseniy Vershinin and Ignaz Forstmeier. The four met while studying at the Center for Digital Technology and Management, a joint institution from the two main colleges in Munich.
The idea for Personio, which is focused on serving small and medium-sized businesses, came from hearing how a friend was struggling to manage HR processes at the company where he was working as a chief technology officer, because he didn't have the necessary software.
So the four set about creating a solution. As students, they didn't have an office, so worked wherever they could find space at college to build Personio's first software product. They scrambled together any savings they had to help with the costs.
Once they got customers paying to use that first piece of software, they used the revenue to buy their first software licenses, rent out a small office space and hire a small number of employees.
Then, in July 2016, Personio raised 2.1 million euros in a seed funding round, with investors including Global Founders Capital, which has backed the likes of LinkedIn and Facebook, which recently rebranded as Meta.
Renner said that before Personio could receive that first round of funding, the founders had to ensure they had paid any outstanding invoices, which he explained was a standard condition of fund-raising deals.
He said: "I still have a screenshot from that bank account: We had like a couple of 100 euros left in the bank account before we then received our first round of funding, which was 2 million [euros] at the time, but it was really interesting how tight we were managing until then."
Personio's financial situation has changed dramatically since then. In it's latest series E round of funding, announced in October, Personio raised $270 million and was valued at $6.3 billion. That's quite a jump for the company, having been valued at $1.7 billion in January in its series D round of investment.
In total, Personio has now raised more than $500 million from investors.
And unlike when it was a fledgling start-up in 2016, Personio said it still had "significant reserves" from its investment round in January, when the latest funding was announced last month.
The latest batch of funding is being used to develop its newest category of software, called People Workflow Automation. This aims to remove software barriers between HR and other company departments, for instance, if various tasks need to be completed across different parts of a business when hiring an employee.
Personio's rivals include fellow HR software start-ups like Hibob, as well as larger incumbents like SAP and Salesforce.
'Not about being a boss'
Heading up a multi-billion-dollar software business seems worlds apart from Renner's part-time job as a yacht skipper while he was in college.
Renner said that he'd always had a passion for sailing. As a college student he couldn't afford to pursue it as a hobby with his own money, so decided to get his yachtmaster's license. This enabled him to become a skipper and get paid during college vacations to drive boats around the world, which also helped him finance his studies.
But it wasn't all fun and glamor. Being in command of a boat can be "intense and [a] harder job than most people think," Renner said, given that he was responsible for the crew and guests.
That level of responsibility in leading a crew did help prepare him for the role of CEO, in terms of recognizing the importance of taking on board input from his employees.
However, for Renner building a company is "not about being a boss or being someone's boss," he said, explaining that he wanted to encourage a "level of ownership" among Personio's employees.
Renner said that he wanted to make sure employees are "empowered to make the right decisions and empowered to act like an entrepreneur."
And clearly something is working, Personio now has more than 1,000 members of staff, up from 350 employees in 2020.
— CNBC's Ryan Browne contributed to this story.
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