Our data suggest that valuations in the HR tech space are picking up. Two deals stories from last week confirm the trend.
Australia-based human resources software provider Employment Hero raised A$140m ($103m) in a series E round, which included enterprise software provider Salesforce’s investment arm, Salesforce Ventures, and recruitment portal operator Seek. The round, which reportedly valued the company at $586m, was led by growth equity firm Insight Partners, also with contributions from venture capital firms OneVentures and AirTree Ventures. Founded in 2014, Employment Hero provides cloud-based software which helps small and medium-sized enterprises with employee training, payroll, retention, remote work management, human resources implementation and legal compliance, reducing administration time by up to 80%. The company currently services more than 6,000 businesses and has increased its headcount by 65% and its revenue by 113% over the past year.
US-based recruitment software developer SmartRecruiters, which counts Salesforce among its backers, completed a $110m series E round led by Silver Lake Waterman. Growth equity firm Insight Partners and venture capital firm Mayfield Fund also participated in the round, which reportedly valued the company at $1.5bn. The funding will be used to support continued development of the company’s software, focusing on artificial intelligence, automation and conversational interfaces.
Launched in 2010, SmartRecruiters provides software used by enterprises to attract, select and hire new talent. Its talent acquisition platform can be used for applicant tracking and screening, candidate relationship management and text-based recruiting. The platform has been used by 4,000 businesses globally, including payment services firm Visa and video game developer Ubisoft.
The HR tech space has received much attention by corporate venture investors, as shown on the GCV Analytics bar chart below. The number of corporate-backed deals in this area was mostly stable before it took off in 2018 and reached an all-time high of 72 in 2019. Even though it suffered in 2020, dropping to 58 deals, likely due to the impact of the pandemic, over the first seven months of this year we have already tracked 50 deals in such businesses and, most notably, with a total estimated capital in them at $1.88bn, more than in any other year, which indicates that there is an upward pressure in valuations.
