Zenefits, the startup that began with an intention to help small businesses find insurance quotes and manage employee benefits on a single platform, is now completely shifting focus to human resources software, which will end its brokerage business.
“This is an exciting pivot for us,” CEO Jay Fulcher told Forbes. “We go from being the company that talked about going it alone and not partnering with anyone to one that believes in working together.”
This latest move by the company will help it get back on its feet after the company was found to be in breach of state insurance laws.
With this change the company will no longer act as an insurance broker; instead, it will provide software that sells benefits to these insurance companies. Zenefits said it will get a cut of income from the deals these brokerage firms make.
Going ahead, Zenefits will concentrate on software for managing human resources at small and medium-sized businesses and helping track payroll, benefits and compliance. It will be entering a partnership with OneDigital, which has 1,000 benefit advisors and is one of the few the companies Zenefits intends to declare to work with territorial brokerages over its platform. The organization additionally incorporates with more than 40 office software tools today, such as Box, Salesforce and Slack.
Zenefits co-founder and now former CEO Parker Conrad stepped down from his position last year in February during a compliance scandal. That’s when Fulcher, the former CEO of Ooyala and Agile Software, took over Zenefits.
During the Conrad’s reign the company had dismissed the idea of partnering with traditional brokers. With new management the company has opened its mind to the idea of partnering with brokers.
Fulcher says that this isn’t a ploy to make Zenefits a diluted platform. Instead, Zenefits hopes to increase its addressable market — one that might graduate beyond the products that it offers as they look to those embedded, local brokers to handle the increasing complexity of insurance. By doing so Zenefits is hoping to remove the barrier for those companies that wanted to grow beyond their brokerage while staying on the service. “Our focus is on being a SaaS company, and not a broker,” he said.