I don’t normally share articles about fundraising, but Zenefits is a truly exceptional story that happens to reconcile very well with my thinking about potential areas of value in fintech.

Zenefits is exceptional in just about every way.It raised a seed round less than two years ago in July 2013 and has just reached a $4.5 billion valuation, making it probably one of the fastest growing startups ever. Zenefits had $1 million in annualised revenue in early 2014 and grew to $20 million in annualised revenue by the beginning of this year. It says it expects to reach $100 million in annualised revenue by the beginning of 2016 – making the valuation something like 90x revenue.

The most interesting part of Zenefits for me is that it is a continuation of a trend. Zero’s success has been built around owning the rails to the SME by owning the financials and making it possible for others to access from the cloud in real time. Zero enables a whole ecosystem of new financial products to a class of customer that is traditionally expensive to distribute to and assess – think factoring embedded in invoicing, real-time credit scoring, cash management, FX, industry benchmarking, assessment of supply chain risk etc. There is little doubt in my mind that these products can be done an order of magnitude better/cheaper/faster in a Zero-enabled environment than the offline world that has traditionally existed.

The value in Zenefits, for me, is all about owning the rails to the employee in the same way that Zero is about owning the rails to the SME. By giving the payroll away for free, they get access to employees’ cash flow at the source which enables a new ecosystem of financial products for the employee in the same way that Zero does for the SME. This is a new area, so I will leave exactly what that looks like to your imagination, but the possibilities are as endless as they are exciting.