My April 2013 column on the booming business of "compliance" turns out to have been prescient, at least to judge by the story of one successful entrepreneur. The Wall Street Journal's venture capital blog reports that Zenefits Insurance Services recently raised $66.5 million in two weeks at a $500 million valuation in a round led by the Silicon Valley venture capital firm Andreessen Horowitz. From the Journal:
Mr. Conrad discovered the frustration and difficulty of HR–administering payroll and benefits for employees while at the same time complying with increasingly burdensome government regulations–at his last startup, the investment management company SigFig Wealth Management LLC.
After his experience at SigFig, he told VentureWire in January, the Obama administration's 800-page Affordable Care Act, which employers will have to comply with by next year, looked like "a whirlwind coming down the pike."
He designed Zenefits to comply with that act. When an employee is hired or leaves, the software enables the employer to check a few boxes, letting the software do the work of connecting to back-end payroll, insurance and other systems, gather information and file whatever's needed...."The unique and defining thing about Zenefits is that we're an integrated, all-in-one approach to this stuff," Mr. Conrad said. "I believe some of these compliance complexities will drive the entire market toward that. You can't really roll your own stuff any more."
The company's co-founder and CEO is Parker Conrad, a former managing editor of the Harvard Crimson and cancer survivor who I tried unsuccessfully to hire at the New York Sun. If someone has to make money from the "compliance complexities" of ObamaCare, I'm glad it's him.
