An hour boosted one startups valuation by $1 billion

In case you haven’t heard of Zenefits, it’s one of the hottest startups in the Valley now. It provides free HR software that makes it easy for companies to sign up for insurance and other related services.

In fact, the company’s been growing so fast that investors are almost lining up to throw money at Zenefits. In May, it raised a whopping $500 million at a $4.5 billion valuation. That’s up nearly 9X from the $500 million valuation it got just about a year ago. In total, the company’s raised over $583 million since its founding two years ago, reports Business Insider.

But Zenefits could have been worth a lot less — $1 billion, to be exact — if it weren’t for Conrad’s decision to give another hour before closing his last round of funding.

Conrad told the Wall Street Journal that he had three different offers on the table that valued his startup at roughly $3 billion earlier this year. Soon, he was about to close the round at a $3.5 billion valuation.

That’s when his mentor and general partner at VC firm Andreessen Horowitz, Lars Dalgaard, told him to wait. He told him there was a “feeding frenzy” in Zenefits and that he could possibly get a nice little bump in value if he waited until the end of the day.

It didn’t take too long for Conrad to see another huge offer to come in: Just an hour later, Fidelity offered to invest at a $4.5 billion valuation.

“We could have raised infinite amounts with a $3 billion valuation,” Conrad told the WSJ.

As with most hot startups, Zenefits’ $4.5 billion valuation is likely based on its massive growth potential. In May, Conrad told us Zenefits was on track to hit $100 million in revenue by January 2016, nearly a five-times growth from January 2015. Last year, the company had about 2,000 small businesses as customers, but now it claims to have signed up more than 10,000 companies.

And that’s why Conrad sounds confident in his company’s future, despite its relatively low revenue compared to its private market valuation. “We can be a $100 billion company, giving investors today a huge return. We make a lot of money on insurance,” he told the WSJ.