Pento: London payroll startup led by 28-year-old raises $35 million in round led by New York-based VCs

A 28-year-old founder today hailed the London tech scene's influx of American capital as he raised $35 million (£26.4 million) for his payroll startup.

Jonas Bøgh Larsen launched Westminster-based Pento with co-founder Emil Hagbarth Rasmussen, 31, in 2017.

Their startup fully automates the payroll process for a monthly fee, eliminating need for outsourcing to accountants. It has grown 10x inside a year and counts restaurant chain Honest Burgers and challenger bank Starling as customers.

The founders' new raise was led by New York-based investment firms Tiger Global and Avid Ventures, and comes just six months after they took $15 million in a Series A raise. Existing investors, including Airbnb backer General Catalyst and Saul Klein's London-based Localglobe, also participated in the latest round.

Bøgh Larsen told the Standard it is "so exciting" to see the UK and European tech scene attracting "top-tier" US-based and international venture capital.

His comments came as the latest annual "State of European Tech" report today revealed investment in the sector is set to exceed $100 billion a year.

Tiger, a 20-year-old US tech investment firm with over $90 billion under management, has been investing large sums in the capital in 2021. It has previously backed giants from Facebook and Stripe to LinkedIn and Bytedance.

Bøgh Larsen added that being based in London, rather than the pair's native Copenhagen, has helped expose Pento to more potential clients "than we would have access to in any other city in the world".

Avid Ventures backs early stage firms. Its founder, Addie Lerner, said she doubled down on an investment in Pento because it is "revolutionising how businesses pay their staff".

Pento claims to reduce the amount of time firms need to spend on the monthly pay run by 80%. It is competing with the likes of software startup Payfit, which has raised in excess of $200 million.

The State of European Tech reports findings were not all positive, however. It concluded the sector still has a long way to go in terms of investing in female and minority-led companies.

It found mixed and diverse teams captured just 9% of all capital raised by tech firms in Europe this year.