Josh Bersin: Unicorns are everywhere (in the HR tech market)
The HR tech market is as hot as I have ever seen it. New funding announcements are coming across my desk almost every day.
Why the market growth and huge investments? That’s because almost every business challenge points toward needing more HR tech. Pandemic? We need HR tech to help people work from home. Hybrid work? We need HR tech to schedule employees coming back to physical workplaces and to keep work spaces safe. Hot job market? We need HR tech to find, hire, and retain people amidst labour shortages. Digital transformation? We need HR tech to reskill and upskill our workforces.
Here are a few of the HR tech unicorns:
- Go1 raises US$200 million at US$1 billion valuation: Go1, which has only one direct competitor (OpenSesame), has become the “middleman” or “Spotify” of corporate learning. Go1 has a vast content library of approximately 150,000 titles, provides access to other content providers, and has an easy-to-buy, easy-to-use business model. The company just received a US$200 million boost from several big investors (Microsoft, Salesforce, Softbank).
- SmartRecruiters raises US$110 million at US$1.5 billion valuation: Jerome Ternynck, the founder of SmartRecruiters, is a seasoned veteran in recruitment technology. Under his leadership, SmartRecruiters has grown from a mid-market ATS platform to one of the leading enterprise solutions. SmartRecruiters now competes with companies such as Avature, PhenomPeople, Oracle, and iCims. In the last 12 months, the company added more than 200 enterprise customers and grew revenue by 50%, demonstrating the company’s strength and the rapid transformation in the recruiting market.
- BetterUp, valued at over US$1.7 billion, is the fast-growing coaching and development company. Its success has attracted many investors to the AI coaching niche, and now Torch and others are now nipping at its heels.
- ai, the leader in AI-enabled talent intelligence, is valued at well over US$1 billion and just received US$300 million. Built around an advanced AI-enabled platform, Eightfold’s solution has disrupted recruiting in a big way.
- Visier,the pioneer and leader in people analytics, just raised US$125 million and now has a US$1 billion valuation.
- Docebo(now public) is now valued at US$2 billion and is growing by more than 60% annually. No LMS company has grown at this rate for a long time.
- ArticulateGlobal, one of the leaders in content development tools, just received US$1.5 billion in funding. The company is part of the creator platform market for learning – a segment that is just getting started.
- Lattice,a performance management platform that mid-sized companies love, is now valued at US$1 billion (the first performance management company to reach this valuation since SuccessFactors was acquired by SAP). Its success is creating interest in vendors like 15Five, Workboard, Betterworks, and TinyPulse.
Why such high valuations?
First, the HR tech market is a healthy and sustainable growth market. With over 100 million businesses around the world and a fast-growing economy, everyone is arming up with HR tech. Even during downturns, this market continues to grow and shows continuous innovation.
Second, products like the ones above (as well as those from HiBob, Degreed, EdCast, Gloat, Fuel50, and 360Learning) are reinventing the market. Learning platforms are AI-powered, skills-enabled, and VR-ready. Talent marketplace systems are becoming integrated employee experience systems. And HR and payroll platforms are becoming management tools and end-to-end hybrid work management systems.
Lastly, interest rates are low so investors are willing to pay. HR tech is not a risky market. Rather, most HR tech companies have solid business potential. And since most are cloud platforms, recurring revenues grow at compounded rates.
Needless to say, this is a very exciting time for the HR tech market and for HR teams. Never before have we had such a wide range of innovative options to help us reimagine HR.
Josh Bersin is a Global Analyst and CEO of the Josh Bersin Company, and will be presenting a keynote session titled, Prepare for the New Paradigm of Talent Management, on Tuesday, September 21 at 10.10am (SGT), at HR Tech Festival Asia Online 2021.