GROWING PAINS: Why $345 million HR startup Namely lost its CFO, CTO and many others

Namely CEO Matt Straz says he’s been restructuring his company because its been growing so fast.

For weeks we’ve been hearing about a top-level executive exodus and a lot of employee turnover at highly-funded HR software startup Namely.

The internal changes have raised eyebrows and stoked speculation of more trouble in a corner of the tech industry already famous for the high-profile implosion of Zenefits in 2016.

Namely was one of the startups that saw a pickup in its business as a result of Zenefits’ troubles, making recent reports of layoffs and turmoil at Namely all the more notable.

CEO and founder Matt Straz acknowledges the sweeping changes across the company. But he says the changes are not an indication of a struggling business but rather of the need to evolve from a startup into a more structured organization.

It’s true that the within a few months of each other, the company’s CFO and the CTO agreed to resign, Straz told Business Insider.

Their departures are part of reorganizations in various departments throughout the company, as Namely looks for more experienced managers to guide a bigger company, he said. Namely is now well over 150 employees and 800 customers, its website says.

“We are growing and doing well and that’s what driving the change,” Straz explained. “We’ve gone from $0 to $30 million in revenue” from the company’s founding in 2012 to last year, he said. “When we grow from $30 million to $300 million, I expect we’ll need another transition,” he said.

Namely is one of the payroll and benefits startups that benefited greatly when Zenefits melted down in early 2016 after Zenefits admitted it was selling insurance in some states without proper licensing. Zenefits was once the poster child for low-cost HR cloud software for small businesses.

When Zenefits grew troubled, VCs doubled down on competitors, such as Gusto and Namely, which saw its growth explode in 2016. Out-of-control growth was ultimately to blame for Zenefits troubles, sources told us at the time.

The companies stepping into this market are therefore under increased pressure not to go down the same road.

Namely has raised about $169 million in total venture funding, with…

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