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

HR Technology

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

In the month of July, an estimated USD 620 Million were invested in various deals across geographies.
Here’s a round-up of major HR tech news in July 2018

The month of July opened with news from Oracle and Future Workplace announcing, based on survey of 1320 US based HR leaders and employees, 93% were ready to trust orders from robots but organizations seem to be doing too little in this area. This survey indicates a large gap between what people are using at home and what they are using at work especially with latest technology in AI and robotics. 

HR Technology solution providers with innovative solutions to solve real business problems using AI and Robotics can thus benefit from this gap in expectation and reality. One such example is, Leena AI, India based HR Tech company that helps automate employee helpdesk is now funded by Y Combinator and is part of their accelerator program. 

In the month of July, an estimated USD 620 Million were invested in various deals across geographies. The industry also saw a continued focus on partnerships and mergers and acquisitions in this period. We mention a few notable deals here:

  1. Samara Capital along with partners Goldman Sachs and Janchor Partners formed an investment platform called First Meridian to buy stakes in HR and staffing companies for about USD 51 million. This is an acquisition of the services business and we expect the consolidation to be augmented with acquisition of technology solutions in near future.

  2. Wipro will acquire Alight HR Services India for USD 117 Million in one of the biggest consolidations in the industry. It’s an interesting partnership where Wipro will look to automate the operations for scalability while adding analytics capabilities to the offerings. We expect more Indian IT services companies to strengthen their presence in HR technology space through a combination of service and technology solutions.

  3. The wellness space within HR Tech continues to attract top dollar investments and one of the biggest deal in this space was announced when League, an employee health benefits company raised USD 47 million in Series B funding. League has marquee clients in the Canadian market and with this series B has raised close to USD 70 million in total funding till date. 

  4. The dream run for recruitment software continues. Greenhouse, recruitment platform, has raised USD 50 million in series D to take its total funding to USD 110 million. The latest round is apparently being used to improve its diversity and inclusion feature which provides nudges to users while writing job postings, referrals and even conducting interviews. This development goes to show investor willingness to back platforms to develop very specific features that have a potential for IP. How effective such technology solutions would be to avoid potential litigation is something that we will wait and watch.

  5. Just as we seem to have accepted the use of biometric and access cards in offices, this space is being disturbed by “frictionless” access. Many companies are experimenting with facial recognition and other technologies in this area. Openpath, one company that provides office access solutions based on smartphone app has raised USD 20 million. These solutions take the BYOD philosophy to employee smart phones and we expect soon the Smartphone war will heat up. Employees might be forced to keep 2 Smartphone devices – one for personal and another for professional use in this burgeoning space. The professional devices consolidation is on the horizon in this context. 

  6. Performance review processes are being reinvented and Impraise a company that provides new age performance management solution has raised USD 10 million in Series A. The company has grown over the last 4 years and this new round of funding will further help in its global expansion and product innovation. The market for new age performance management is very relevant and will continue to attract investor interest. 

  7. If you thought HR Tech is all about tech and all about new age tech, then think again. ScaleFactor, a company that provides accounting and payroll software as service has raised USD 10 million. For us this investment indicates the potential in simple business applications primarily focused on SMB in the HR tech space. This deal particularly highlights the overlapping area between FinTech and HRTech and we reckon that in these areas FinTech companies are likely to emerge stronger than pure play HR Tech companies. 

  8. If you are an established HR Tech player and are looking to strengthen your position in a particular market then acquisition is a sure shot way to achieve that and we have seen one of the biggest acquisition of a regional HR Tech start up by a large HR Tech company this month, when Ultimate Software announced that its acquiring PeopleDoc for USD 300 million. This is good news for HR Tech start-ups focused on a particular geography and a particular niche within the HR space, if you achieve critical mass you are likely to be acquired by a bigger player for about 6 X the funding you raised. 

  9. If you are a large global player focused on a specialized area, then it makes sense for you to pre-integrate with another solution that compliments your offerings. Ultimately both are trying to provide a unified experience to its customers and help in customer retention in this highly competitive market. This is evident from the ADP and Clear Company partnership where HCM and Talent management solutions of the companies are being integrated to offer a unique value proposition. 

  10. The third approach that you see in the market is 2 point solutions come together to create a unique and compelling offering for the customers. You Earned it and High ground have joined forces to create a comprehensive performance management and engagement offering in the market. 

The HR Tech market is maturing and growing at the same time. It is evident from all the news here, this market will continue to see emergence of different delivery models and methodologies. We are most excited about the headroom in this space for new solutions to emerge and for existing ones to grow, we are sure this ecosystem will continue to expand in the future. 

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Topics: HR Technology, #HRTechMarket

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