Berlin-based software startup Kombo acquires its customer Midlane

The Berlin-based SaaS startup Kombo is acquiring the Berlin-based HR tech company Midlane. Midlane was previously a Kombo customer. What's behind the acquisition and what the next steps are:

The Berlin-based software startup Kombo is acquiring the HR tech startup Midlane. With the acquisition, Kombo aims to strengthen its position in the HR market. What's exciting is that the founders already knew each other, as Midlane was previously a Kombo customer. "We used each other as sparring partners and for strategic feedback," says Robin Betz, founder of Midlane. "As we considered the next steps, the discussion arose as to whether it might make sense to collaborate."

Kombo is a SaaS startup. It offers companies the opportunity to connect various human resources software solutions via a single interface, allowing them to be managed centrally.

Alexander Kübel, Aike Hillbrands, and Fabian Rothfuß founded Kombo in 2022. The three met at university and were accepted to Y Combinator in August 2022. One month later, their startup closed its first seed funding round. 468 Capital, Y Combinator, and angel investors were also involved.

The Kombo team also expanded early on to New York, opening a second office there in addition to Berlin. According to Kombo, the US is the startup's most important growth market. The company generates the majority of its revenue there, says Kübel.

Today, Kombo claims to have an annual recurring revenue (ARR) of $6.5 million. Customers include Heyjobs, Qonto, Mercor, and other American scaleups.

The HR technology company Midlane specializes in medium-sized companies. It is primarily aimed at employees who don't have desk jobs, but instead work in logistics or production, for example. With Midlane, companies can record working hours, schedule shifts, and issue payroll. Supported by AI.

Robin Betz and Mathias Klenk founded Midlane in Berlin in 2023. Now the acquisition follows, although well-known investors have supported Midlane in the past – such as the VC Cherry Ventures , the Viessmann family, as well as Bolt founder Markus Villig and Niklas Plath, founder of Flaschenpost.

Midlane's focus on mid-sized employees in assembly, production, and warehousing helps Kombo offer a better product. "This is a billion-dollar market in the US, where there's a severe shortage of skilled workers and high turnover," says Betz.

For Kombo, the acquisition means, among other things, access to talent . "It's difficult for Kombo to find good staff who understand both HR workflows and complex integration architecture," says Kübel. "The Midlane team brings both. In the current labor market, it was actually more efficient to acquire the company than to recruit and train comparable talent individually."

For Midlane, now is the right time to sell because the founders were faced with a decision: either "another round of financing for aggressive growth" or "the opportunity to immediately become part of the leading HR infrastructure," says Betz. "The decision fell on Kombo because together we can achieve growth in six months that would have taken both of us at least two years to achieve alone."

The founders and part of the team are moving to Kombo. Betz will assume the role of go-to-market advisor. This means he will lead Kombo's strategic entry into contact with large companies with more than 1,000 employees. "While Kombo has previously primarily served scaleups and startups, it is now opening the door to the major players," says Kübel. Klenk, in turn, will take on a leading position in engineering.

"A large portion of the midlane team is supporting Kombo in Berlin and New York in various roles," says Betz. "For the few employees whose roles overlap, we've found attractive alternatives."

Kombo's goal now is further expansion in the US and product development – such as its own AI agent. "When applicants click on an interesting job on a job board like Indeed, Stepstone, or LinkedIn, they are often redirected to an external career site," says Clemens Hannen, Growth Marketer at Kombo. "There, they have to create an account, type in their resume manually, and answer many duplicate questions."

This would cause applicants to abandon the process. The agent is supposed to fill out applications automatically – in compliance with data protection regulations and only with the applicants' consent, according to the startup.

Kombo's vision is clear: "We want to become the de facto industry standard and infrastructure provider in HR tech within the next 12 to 24 months, similar to Stripe in fintech."

The HR tech market is growing, but funding volumes are not. This is according to a report by Embrace . Last year, the investment volume of HR startups declined by 23 percent. This means there is pressure to consolidate.