Article: Here’s a round-up of major HR tech news in March 2018

#HRTechMarket

Here’s a round-up of major HR tech news in March 2018

How have the organizations invested in Talent Management? What have been the major trends in March 2018?
Here’s a round-up of major HR tech news in March 2018

The first quarter of 2018 has come to an end and it has been a very busy quarter for HR technology industry globally. With a potentially market-defining announcement in January by JP Morgan, Berkshire and Amazon to an estimated combined investment of more than USD 300 million in HR Tech space in first 2 months of the quarter, the HR technology industry seem to be buzzing with a lot of activity. 

“With close to 30 sub-categories emerging in this space and adjacent applications like Fintech and MarTech looking to add features for their clients, we have also seen a wave of partnerships and acquisitions.” 

As the HR Tech space continues to grow and evolve, we are likely to see more consolidation in the industry. The industry is also focusing on building and acquiring talent for its growth and, we have seen in this quarter attempts by HR technology companies to attract top technology and marketing talent to their teams. 

In March, based on reported news, we estimate a total of USD 600 million were invested in HR technology companies. With this, the first quarter investments in HR technology come very close to USD 1 billion in funding rounds reported. This is very good news for the industry and we are very excited about the diversity of these investments. 

The two big investments

The two big investments that happened in March signify how HR technology industry is shaping up. Historically, 50 percent of HR technology funding has been to recruitment technology. This year seems to continue the trend with USD 100 million invested in Scout Exchange, an AI-powered marketplace for recruiters. The company uses AI to match job positions to recruiters who are most likely to fill those positions based on their past performance.  

The second biggest investment in HR technology space came from an emerging space known as wellness. As many organizations world over are attempting to improve the overall wellness of their employees while optimizing the costs associated with it, this category is slated for explosive growth. Collective Health, an enterprise health management company has received USD 110 million in funding from marquee investors like Founders Fund and GV- alphabet’s investment arm. In this space, such solutions are emerging that approach the employer, while there are other solutions which take the bottom-up approach by creating value for the employees and offering it to the employer. One such consumer health-focused company Welltok, raised USD 75 million in funding to help in their product development and growth.

“As many organizations world over are attempting to improve the overall wellness of their employees while optimizing the costs associated with it, this category is slated for explosive growth.”

How organizations have invested in Talent Management (TM) 

Some other key announcements and developments in March 2018 were:

  • Peakon, an employee engagement measurement, and improvement platform announced that it has raised USD 22 million in Series B. This is one of the biggest investments in this particular category and signifies that companies and investors are really looking at solutions which help them analyze and take actions on continuous employee feedback.
     
  • The advancement of big technology companies in HR tech space continued in March when Facebook announced that its job marketplace feature earlier available in the US and Canada is now available in 40 different countries. This announcement is significant as Facebook is looking to bite into the talent acquisition space which has been the most invested and active space within HR Tech. Facebook has committed about USD 1 billion in its teams, technology, and new programs this year alone to better serve its 2.13 billion active users.

  • Paychex, an HCM solution provider focused on SMB space, acquired Lessor Group, a payroll and HCM solution provider in its bid to grow its international presence and especially business in Europe. This deal is significant to many other HR tech companies as they may look at acquisitions in their target markets as a potential way to achieve inorganic growth in this highly competitive marketplace.

  • Justworks, a company focused on building simple end to end tools for business operations particularly focused on HR tasks has raised USD 40 million in series D. Degreed, a learning and certification platform raised USD 42 million in Series C. While TripActions, a company aimed at rewarding employees who spend less on corporate travel, raised USD 51 million in their 2nd round of funding. While on-demand healthcare concierge provider Accolade raised USD 50 million.  BetterUp, a platform that helps provide expert coaching for individual development, raised USD 26 million. All these interesting companies and the funding received by them indicates that HR Tech space is becoming more broad-based and for innovative solutions and ideas there seems headroom for growth.

  • While this space is experiencing entry of innovative players, it is also experiencing alliances and collaborations across categories to ensure that customers get a comprehensive solution. With close to 30 subcategories within HR Tech, we believe such collaborations and partnerships will only increase over time.

Some of the exciting collaborations that happened in March are: 

  1. Workday and Slack announced that they would be working together for their shared customers to provide an integrated solution. We believe this relationship can grow and slack capabilities can become native to Workday eventually as workplace collaboration is an interesting category within HR Tech.

  2. One of the trends that we observe globally is where HR Tech companies are creating a marketplace, where other HR Tech apps are pre-integrated with the company’s core offerings. Ultimate Software announced that now Career Builder capabilities are available in their marketplace. We have seen similar moves by other enterprise HR Tech solution providers like SAP, Oracle, and PeopleStrong. 

  3. Neeyamo, a global payroll service provider announced a partnership with Talentia Software, HR, and Finance enterprise software, to identify addressable white spaces in markets they jointly serve. 

This is not even a comprehensive list of everything that happened in the month of March in HR tech space. We are extremely excited about the pace and variety of events in the HR Tech space globally. We believe that HR tech is scheduled to continue to grow and consolidate in the years to come while continuing to support innovative solutions to existing problems using leading technologies like AI and robotics. 

Topics: #HRTechMarket, Technology, HR Technology

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