European human resources technology firm Factorial has raised $150 million (Sh19.4 billion) in a Series D funding round that values the company at $2.5 billion, strengthening its push into artificial intelligence-powered workforce management as demand for digital HR solutions accelerates across East Africa.
The funding round was led by General Catalyst, with participation from existing investors Atomico and Four Rivers. In addition to the equity investment, General Catalyst will provide a further $540 million in non-dilutive capital through its Customer Value Fund, bringing the total financing package available to Factorial to more than $700 million.
The fresh capital comes as businesses across Africa increasingly adopt digital tools to manage payroll, compliance, recruitment and employee performance amid growing regulatory requirements and rapid workforce expansion.
Factorial, which serves more than 16,000 businesses in over 90 countries, said the funding will support its transition from a traditional software-as-a-service provider into an AI-powered workforce operations platform designed to automate HR, finance and IT processes.
The company is rolling out a new platform dubbed Factorial One, which uses AI agents to handle administrative functions traditionally performed by human resource teams.
Chief executive and co-founder Jordi Romero said the company had completed a major overhaul of its technology architecture to place artificial intelligence at the centre of workplace operations.
“Ten years ago, we started Factorial as a SaaS company. Today, Factorial is an AI-first company working towards creating agents for our clients,” Romero said.
The investment highlights growing investor confidence in enterprise software companies seeking to capitalise on the global shift toward AI-driven business processes.
For East Africa, the development comes at a time when companies are increasingly investing in cloud-based HR systems to manage rising compliance demands and improve operational efficiency.
According to Deloitte’s Africa Human Capital Trends report, more than 60 per cent of medium-sized enterprises in major African cities have adopted at least one digital HR tool, reflecting a broader shift away from manual workforce management systems.
Industry data shows the African payroll software market, valued at $487.3 million in 2026, is projected to reach $1.66 billion by 2035, driven by cloud adoption, growing compliance requirements and the expansion of mobile-first enterprise technologies.
Businesses across Kenya have faced mounting pressure to digitise payroll and employee management processes as governments tighten tax reporting requirements and labour compliance standards.
The move toward automation is also being fuelled by the need to reduce administrative costs and improve efficiency. Companies that have implemented digital HR systems report significantly shorter payroll processing times and fewer compliance errors compared with manual systems.
Factorial believes the shift toward AI-powered workforce management will be particularly relevant for fast-growing businesses across the region, where managing payroll, employee records, performance tracking and regulatory compliance often becomes increasingly complex as firms expand.
Speaking on the company’s ambitions in the region, Francesc Rullan described East Africa as a key growth market for enterprise technology providers.
“East Africa represents one of the most exciting growth frontiers for enterprise technology. The ambition, the pace of business growth, and the appetite for intelligent solutions across Kenya and the wider region are unlike anywhere else we operate,” he said.
The latest funding places Factorial among Europe’s most valuable HR technology firms and positions it to compete more aggressively in emerging markets where businesses are accelerating investments in digital workforce infrastructure and AI-powered automation.
As companies across Kenya and the wider region seek to streamline operations and comply with increasingly complex regulations, technology providers are betting that AI-driven workforce management will become a critical part of enterprise software spending over the coming decade.
