CEO Parker Conrad acknowledged that his startup, valued at $4.5 billion, is failing to meet its growth plans.
It’s been a rough past week for Zenefits since the Wall Street Journal reported that the human resources software startup is likely to miss its ambitious revenue targets and is cutting back on expenses.
On Monday, Zenefits CEO Parker Conrad acknowledged to Forbes that the company’s sales aren’t growing as fast as expected. It is unlikely that Zenefits will reach its target of $100 million in annual revenue, according to the report. Still, Conrad hopes to eventually reach that target; it just might take a little bit longer.
“If we fall short, that sucks, but we’ll be there a couple months later,” said Conrad.
Zenefits is currently valued at $4.5 billion and is a member of Fortune’s list of so-called unicorns, which refers to startups with a valuation of $1 billion or more. Like many of its unicorn siblings, Zenefits has raised millions of dollars to build the company while still working on how to make money.
In May, Fidelity Management led a $500 million funding round for Zenefits, which Conrad, at the time, told Fortune was necessary to fund the startup’s growth plans.
“We could always grow slower,” said Conrad. “If we wanted to grow less quickly, we would need less capital, but we think this is right thing to do and our metrics suggest the return on investment would be very high.”
Last week reports came out that investment firm Fidelity, an investor in privately held Zenefits, raised an alarm bell about the company’s direction. It cut the value of those shares on its books by 48%.
Although Zenefits’ sales are growing more slowly than expected, the company is still rolling out new services. On Monday, it showed off a new payroll processing service.
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