With prestigious early backers like DreamWorks co-founder Jeffrey Katzenberg, Sparrow has just raised a $35m Series B round for its HRTech start-up.
HRTech start-up Sparrow has continued its run of funding success, and has raised $35m in Series B funding, for its start-up that aims to eliminate red tape, and paperwork when it comes to paid leave – all utilising AI (artificial intelligence).
While Dreamworks’ Katzenberg led the previous round – he is also managing partner of venture capital firm WndrCo – this $35m Series B round was led by SLW, bringing the total investment in Sparrow to $64m. SLW was founded in 2012 as Silver Lake Waterman, a later-stage growth division within Silver Lake, a global leader in technology investing. In 2024, SLW became an independent firm but has retained a collaborative relationship with Silver Lake.
“Leave is complicated and stressful,” says Sparrow CEO and co-founder Deborah Hanus. “It touches so many aspects of the company – legal compliance, insurance, state agencies, payroll, HRBPs, managers, and employees. Everything is always changing, and no one has the data they need when they need it.
“Sparrow has centralised that data to truly make leave – and adjacent areas of legal compliance – stress-free for the thousands of caring companies who trust us to support their workforce.”
Sparrow says it will use this new investment to scale its global leave management technology, enabling the company to expand its technology to address adjacent labour compliance issues.
“We are incredibly excited about Sparrow because they are addressing one of the most complex and underserved areas of HR by utilising AI to automate the manual, error-prone tasks that companies and employees encounter today,” said Matt Walsh, managing director at SLW.
“By combining deep compliance expertise with intelligent automation, Sparrow is transforming a significant pain point into a streamlined, employee-centric experience. As the future of work demands more flexibility and support for employees, Sparrow is uniquely positioned to become the category leader in this essential part of the human capital management (HCM) stack.”
“My mantra is do good by doing good,” says Katzenberg, whose WndrCo led Sparrow’s last funding round. “When someone has a life event that requires them to take leave, great employers step up so that no one has to choose between work and the people they love. With Sparrow, a seamless leave experience brings employees back more loyal, more engaged, and eager to share just how supported they felt.”
Sparrow currently has some 1,000 company customers, including big names like OpenAI, Reddit, and Oura, making it one of the leading lights in the HRTech world.
And Sparrow certainly has its timing right. According to 2024 research in the US by Mercer, as paid leave offerings improve, HR and benefits leaders are facing new challenges when it comes to administering them.
In its survey of 630 US business leaders, Mercer found that compliance with state and local leave mandates and better leave administration were two of employers’ top priorities in the US.
“Up until the last five years or so, paid time off and leave policies were the glaciers of employee benefits – they changed, but so slowly that you couldn’t really see it happening,” said Rich Fuerstenberg, senior partner, Health, at Mercer.
“We’re in a new era now. The employers surveyed said they are struggling to handle the complexity of constantly changing leave laws that vary from state to state.”
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