How Venture Capitalists Are Changing HR Tech Landscape

During last five years, investment in HR tech companies has been making news across the industry. To mention few of them:

  • HR and workforce management made to top 5 sub-industries for Saas investment.

  • Major Acquisitions – SumTotal by Skillsoft, Bright by Linkedin, Kenexa by IBM, etc.
  • Workday – beat 10 SaaS exits during 2011-2014 in IPO exit type category.

  • “Anaplan” was listed in top 15 Saas deals to VC-Baked companies in 2014.
  • $2.4B across 383 deals in 2015, representing 62% growth in funding over the total in 2014.

  • In Q1’16, HR tech saw roughly $600M invested across 106 deals, which is higher in count and investment too compared to Q1’15.

  • The launch of HR specific investment funds such as ““.
  • And much more.

HR software selection by the features is coming to an end. It’s an era of disruption as detailed by Josh Bersin (Founder and Principal at Bersin by Deloitte) the Top 10 Disruptions in HR Technology. The investment pattern in the industry very well supports this prediction.

 

HR Tech Investment Round-Up (2011-Q1′ 2016):

BI Analytics & Performance Management and HR & Workforce Management among top 5 sub-industries for Saas investment.

SaaS-by-Sub-Industry-Tibco-Report

 Source: http://www.cbinsights.com

 

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The Most Targeted HR Areas By Tech Startups:

Recruitment (especially social recruitment), Operation Management, Culture and productivity, HR Insurance & Benefits and HR  Analytics.

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Deals And Dollars Trend in HR Tech:

$2.4B across 383 deals in 2015, representing 62% growth in funding over the total in 2014. In Q1’16, HR tech saw roughly $600M invested across 106 deals, which is higher in count and investment too compared to Q1’15.

Source: http://www.cbinsights.com

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Movers & Shakers:

Andreessen Horowitz, 500 Startups, NEA, Khosla Ventures and SV Angel, are top 5 active HR tech investors. The investment areas are primarily Recruitment, , HR Management and Freelance market for recruiting contractors and freelancers. 

Source: http://www.cbinsights.com

Interested in reading in details: Refer to All About VC Trends in HR Tech Companies on this blog.

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The boom in HR Tech space has led to the apparent evolution i.e. creation of HR specific investment funds such as “HR Fund” – By HR experts, For HR Tech Experts.

Kelly Services & Temp Holdings has also launched a similar fund – called as Temp Innovation Fund. This fund will primarily focus on recruitment services, HRinformation systems, learning management, assessments, employee analytics and engagement, payroll and more.

 

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Nearly 60% of the AI companies that were acquired since 2011 had VC backing. There have been 5 major acquisitions already in 2016.

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And few of them are trying to innovate HR space:

 

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I hope you found this edition useful. I will be hoping to hear your comment. In a case of any question related to this topic or HR Analytics, you can connect with me via any of the channel listed in the left sidebar.

You may also want to refer, share or contribute to The HR Analytics Library

 

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About Manoj Kumar 68 Articles
A senior management consulting professional and an entrepreneur by heart, Manoj has led global change programs for fortune 500 companies like HSBC, Fidelity Investments, and GE. His expertise lies in functional strategy development, operating model building, process analysis, operational improvement, and simplification including global implementation of BI technologies. In 2014, he was recognized as one of the Top 72 HR Analytics Influencers worldwide. He is currently working as the Vice President, HR Analytics, HSBC. He is also very active in the Entrepreneurial community in India. His entrepreneurial stints include – India’s first online Toy Rental Company “Rentoys” (http://www.rentoys.in), featured in Outlook Money, ET, DARE, UTV Pitch, ET Now, BangaloreMirror, Indian Express, DNA) and an online marketplace for Indian voiceover artists – VoiceHired.com (1000+ artist community)