The talent industry embarked on its own recruitment drive recently, as three of its biggest names secured large acquisitions in the last month.
LinkedIn, the social media platform aimed at professionals, has made increasingly large strides into the recruitment sector over the past few years, and enjoyed considerable success. This progress has been augmented by a deal to buy Bright.com, a job-search startup with an emphasis on data. LinkedIn agreed to pay $120 million for the San Francisco-based company at the start of February. Bright.com launched from stealth mode in 2012, when it announced $6 million in funding from various unnamed angel investors. The company then raised a Series B round of investment in September of last year, which saw Toba Capital and Passport Capital participate.
LinkedIn has been much hyped by investors, and commands a startlingly high valuation. The company has a market capitalization of $24.44 billion, despite predicting revenue of $460 million or less for the first quarter of 2014. But this acquisition will strengthen the company’s hold on the social recruitment market, one which it already dominates. The company has also made moves to enter other markets, and will launch a Chinese version of its platform. The professional network already boats 4 million users in China, despite the service being in English. In China it will compete with the likes of Tianji, Ruolin and Dajie.
Meanwhile, one of the online recruitment industry’s oldest and biggest players, Monster.com, acquired two young startups, TalentBin and Gozaik. Both companies focus on recruitment through social media and Monster will hope to capitalize on the shift to social in the careers space, largely pioneered by LinkedIn. Boston-based Gozaik matches candidates to jobs primarily using Twitter, while TalentBin, founded in San Francisco, uses all social media platforms to bring employers and talented individuals together. TalentBin raised $3.2 million over two rounds of investment last year. SV Angel, FundersClub, First Round Capital, Charles River Ventures, Foundation Capital, New Enterprise Associates and Lightbank all pumped money into the company. In contrast, very little is known about Gozaik or its investors.
Financial terms for both of the acquisitions were not disclosed, though Monster.com has promised more details during an investor briefing in May. The company has suffered from falling revenues in the past year. In the last quarter of 2013 revenue for Monster.com stood at just under $199 million, compared to more than $211 million over the same period last year.
Workday, which offers cloud-based applications designed to make the jobs of HR professionals easier, has also taken a big step into the recruitment space, acquiring Identified for an undisclosed amount. Identified, which has raised $22.5 million to date, provides analytics-based recruitment software. Workday, in contrast to Monster.com, has enjoyed an increase in revenue over the last year. The company’s last quarterly report showed $468.9 million in revenue, an increase of 71 percent from the same period last year. It’s not yet clear how Identified will fit into Workday’s business, but there is huge potential in the alliance. Identified raised a $21 million Series B round in 2012, and the likes of VantagePoint Capital Partners, Capricorn Investment Group, Bill Draper, Innovation Endeavor and Transmedia Capital contributed.
Analytics-based recruitment, which is used in some way by all of the above companies recently acquired in this sector, represents not just a trend in the talent industry, but a monumental shift. These programs can gather data from different forms of social media and suggest the right candidate a company should hire. LinkedIn has a strong advantage in this field as it holds a huge amount of data from its own users. But there are still parts of the market up for grabs. LinkedIn primarily features university-educated individuals, while companies such as Identified claim to be able to match candidates with hourly-paid positions that might not require a degree.
The talent sector is packed full of promising, up-and-coming companies, seemingly headed for profitable exits. One of them, Glassdoor, raised $50 million in December and has begun to consider an IPO, according to the company’s CEO Robert Hohman. The job-review site is also a recruitment platform and aims to become a global company. Glassdoor’s latest investment round was led by Tiger Global Management. Entelo is another trailblazer in this industry, and has already raised over $3.5 million from Menlo Ventures and Battery Ventures. The company uses algorithms to narrow job searches and counts Yelp and Square among its customers. Entelo scours through millions of data points to provide recruiters with a detailed picture of potential employees.
The use of data analytics is a wider trend of the whole technology industry, and in recruitment it has a well suited purpose. Any startups currently active in this field are either enjoying the benefits this form of analysis brings, or ruing the fact they are not yet involved. The exits of Bright.com, TalentBin, Identified and Gozaik show just how important, and valuable, this space is. Those late to the data analytics field, may just have missed the boat.