HR Tech News – May 2019

In the month of May things have become quiet in the world of HR Technology. Overall the market saw a total of USD 153 million invested across 6 deals. This number is the lowest both in terms of total dollars invested and number of unique deals in a month this year With 75% of the deal money going into talent acquisition we once again focus on this market this month. We have the key news from the market for you here. Read on for more details.

Talent Acquisition Takes Lead Again

When 4 out of 6 deals in a month are about talent acquisition you know this space is not showing any signs of slowing down.

SmartRecruiters secured USD 50 million in Series D, taking the total funding raised till date to USD 100 million. With this they become one of the well-funded Talent acquisition technology company. The company has predictably said this funding will be used to accelerate product development and market expansion. On the product development side, they are looking to accelerate their AI capabilities. The use of AI in talent acquisition is spreading like wildfire. All major talent acquisition solution providers today claim to use AI. What is interesting is to now see how companies like SmartRecruiters will use their funding to create unique use cases.

Platform = Technology + Human Network

Karat is an innovative platform focused on solving the problem of quality technical interviews for technology companies. This platform combines technology and human networks to build a unique business case. They have raised USD 28 million in series B by Tiger Global. Given the track record of Tiger Global this is an interesting investment to watch out for. This one goes to show that if you can create a unique value proposition focused on an industry you can succeed. I personally like this combination of technology and human network as I strongly feel we need more such solutions which integrate these 2 capabilities. Such platforms have the potential to alter the narrative of whether technology will make or break jobs.

Imagine a situation, you run a restaurant and suddenly one of your experienced staff is knocked off due to some personal reason. She is not going to make it work and your busy hour starts in another couple of hours. You can now hope to find a pre-qualified person who is willing to take up her space as a gig via Instaworks. They have raised USD 18 million to help them expand within the US. The platform once again combines human network with technology. This is very similar to Uber for hospitality workers. Your star rating and behavior on the platform and outside it will bring certain benefits and punishments. Does anyone remember an episode from Black Mirror here? I just hope we don’t take this one that far.

Wellbeing and Learning

The other 2 deals this month are in the wellness and learning categories. The wellness category has seen some action this year and it’s our estimate that it will continue to grow.

OpenSeasme is a perfect example of how the learning space has evolved. It’s a solution that solely exists because the market has evolved in a way. They have now raised USD 28 million in growth funding focused on product development and market expansion. For buyers of learning solutions, the marketplace appears full of integrated and point solutions. Recent years have seen content curation and suggestion as key capabilities added to the learning platforms. Companies and individuals now want to identify the best courses aligned to their needs right from their LMS platforms. This is an exciting middleware piece in the learning story of many organizations.

Employee wellbeing is being reimagined in all possible ways. Companies have traditionally focused on health and safety related aspects as they fall under statutory obligations. Offering medical benefits has been another most common way. Most of these are reactive solutions and technology exists today to manage these efficiently. Companies are now increasingly looking for proactive tools which help reduce their turnover, absenteeism and even insurance costs. One of the areas in the wellbeing aspect is mental health. Traditionally a taboo subject more companies are realizing the relevance and importance of the same. ModernHealth is a platform solution that helps companies offer mental wellbeing solutions to their employees. It has raised USD 9 million in Series A. I am personally very happy with this development as I believe we need more similar offerings. Yet again this is a platform that combines technology and human networks and hence is my personal favorite.

Conclusion

Moth of May has been relatively a quiet month as compared to how we started this year. Q-1 has seen USD 1.04 Billion invested in 21 HR Technology deals. Two months into Q-3 we have seen USD 457 million invested across 22 HR technology deals. This indicates Q-2 is running at a 50% rate of Q-1. And don’t forget we also had USD 11 Billion mother of all deals in Q-1 too.

While the overall pace of deals seems to have slowed down, the number of deals is about the same. That is great news. We see more and more HR technology companies being funded. We see existing companies getting additional funding bolstering their position and confidence in this market.

Use of technology to create and deliver HR related solutions is very commonplace now. Today it is not about whether you would use HR Technology. How you piece the puzzle together to deliver value is what matters the most.