A couple of observations:
- HR happens in the cloud – all of the companies that received an investment build SaaS solutions with subscription revenue models.
- HCM & Pay remains the largest category, while some of the largest investments took place in the Mental Health space.
- The Mental Health space is heating up, with investors poring over $1B into this segment.
- HCM Suites often include analytics and dashboards. Even so, employers need more insights and focused Workforce Analytics is a category that is up and coming. Visier attracted $125M and Charthop raised $35M in funding.
- There are many companies building Talent Acquisition solutions, using AI and chatbots and other automation tools to help companies quickly find the best talent. Despite the noise in the market about talent shortages, the average investment is the lowest of all categories.
- The majority of HRTech deals fund US-based companies. While these companies do not always build global solutions (e.g. benefits), most of them sell to multi-country companies. The rest of the world more often adopts a US-process as the standard.
- A total of 150 investors led or co-led these deals. Andreesen Horowitz, Softbank Vision Fund 2 and Tiger Global Management each led 3 funding rounds. 10 investors led 2 deals each. Even though some of these 150 companies also participated in funding rounds led by others, none of them are dedicated to the HRTech space. The good news is that HRTech companies are able to interest a wide variety of investors when they want to raise money.
- Several HRTech Unicorns were created in the past 6 months: BetterUp, Degreed, Eightfold.ai, Lattice and PapayaGlobal are among them. I expect more companies to reach a $1B valuation in the next 6 months. It shows that HR is going digital, companies are willing to pay for HRTech and these companies are reaping the benefits.
Every report looks at the HRTech space a bit differently, so what is the scope of my HRTech research?
During the pandemic, a new category called WorkTech emerged, which combines HR solutions with other systems that support the digital workplace, like experience and productivity platforms.
While I understand the approach, I continue to focus on HRTech: the solutions that directly support the HR or People function and are most likely to be procured by CHRO’s and their teams.
That means that I exclude the following solutions from this overview:
- Productivity platforms
- Job boards
- Marketplaces for independents
- Course platforms and EdTech (it’s a category by itself)
- Experience technology
- Solutions for gig and shift workers
- Virtual office
- Event platforms
To establish the overview, I track investment news from many sources across the world, in a couple of languages. I am aware that the list is not complete: e.g. because a company doesn’t publish a press release - this happens more often than you think - or the investment is private. Nevertheless, if you think a company is missing, or you want to check if it was included, please reach out.
Where I am Speaking
Join me at this event:
Did you enjoy this newsletter?
SHARE it on Twitter
and your other social media!
FORWARD this email to friends or colleagues.
What can I do to make it better for you?