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Platforms, not solutions, can lead the way.
The market b HR technology, which runs the gamut from workforce management to applicant recruitment and tracking systems, is remarkably resilient in the face of both pandemics and economic headwinds.
In fact, some argue that it is because of these headwinds that HR technology has attracted and continues to attract the attention of investors. While the pandemic has prompted companies to invest in digital infrastructure as employees move remotely, macroeconomic fears have increased the pressure on HR teams — some of which have had to contend with layoffs among their ranks — to carefully screen candidates.
Investors also clearly saw the opportunity. In the year In 2021, venture investors poured more than $12.3 billion into HR technology startups, which is about 3.6 times the amount invested in 2020, according to Pitchbook data. That trend continued in 2022, with megadeals investing more than $1.4 billion in the sector in the first two months alone.
“HR technology startups must demonstrate a clear return on investment by demonstrating not only top-line growth, but bottom-line efficiency.” Alison Baum Gates, General Partner, Semper Virens VC
In early January, Paris-based payroll software developer Payfit closed a $287 million Series E that brought its total funding to nearly half a billion. That same month, Darwinbox, which offers workforce recruiting and virtual onboarding, landed $72 million at a valuation of more than $1 billion. The list of successes goes on: $300 million was raised in April. SeekOut raised $115 million in January. And Personio held $200 million in June.
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