HireArt, which TechCrunch previously described as a “resume killer” job market, today announced it has raised $26.25 million in a Series B funding round led by Three Fish Capital with the participation of more than “half a dozen” angel investors. CEO Nick Sedlet said the money will be invested in product development and will more than double HireArt’s 82-person workforce over the next year.
HireArt was originally founded in 2012 as an “assessment company” – the startup sourced and screened candidates for jobs for companies much like a temp agency. But the co-founders – Dain Lewis, Eleonora Sharef and Sedlet – discovered that many of HireArt’s clients were hiring its employees by putting them on the staffing firms payroll as contractors.
“It was an ‘aha’ moment for us – there was a market that wanted our supply product and had incredible unit economics,” Sedlet told TechCrunch in an email interview. “So in 2017 we ‘refounded’ the company and launched our current model whereby HireArt recruits and employs workers on behalf of companies.”
Prior to HireArt, Lewis was a senior business analyst at commercial real estate firm General Growth Properties, since acquired by Brookfield Property Partners. Sharef was a business analyst at McKinsey and Sedlet was a strategist at Goldman Sachs.
Companies often use placement agencies to hire and employ workers who cannot be classified as independent contractors. Agencies focus on recruiting candidates, but – as Sedlet says – they don’t pay much attention to the post-hire experience.
“As a recruiting client, it’s difficult to manage basic workflows, like putting together a roster of workers, giving someone a bonus, or approving a PTO. As a worker, the recruiting industry offers only rudimentary benefits, makes basic administrative tasks difficult, and certainly provides little support like career growth and performance management,” Sedlet said. “We believe that great software – coupled with caring support – solves these problems, enabling self-service functionality for businesses and workers, and providing an employment experience worthy of the value that entrepreneurs bring. to businesses.”
With HireArt, a hiring manager can ask workers to receive a shortlist of candidates and schedule interviews before making offers. Through the platform, managers can perform tasks such as changing pay rates, approving expenses, and generating reports.
“A company like Meta has tens of thousands of contractors. A typical HireArt client might have dozens or hundreds of contractors, employed by a handful of recruitment agencies,” Sedlet explained.
Sedlet describes the recruiting industry as a fragmented but massive opportunity, estimated at nearly $500 billion in the United States alone. Tens of thousands of recruiting and placement agencies are vying for a slice of the pie, but the biggest only has about 7% of the market.
Because HireArt goes to market like recruitment agencies do, it often competes with them for new business. But HireArt doesn’t call them rivals. On the contrary, President and CRO Chris Brower said that HireArt partners with agencies to enable them to submit candidates to its clients’ vacancies and then employs those workers, sharing the revenue with the recruitment partners.
“It gives our customers access to a large pool of talent, all employed through a single platform,” Brower told TechCrunch via email.
HireArt’s customers include Amazon-owned Meta, Carta, Zoox, and ride-sharing platform Via. Several of these clients have announced layoffs or are reportedly planning layoffs as macroeconomic headwinds take their toll. But Sedlet said he is confident that HireArt, although not currently profitable, will achieve profitability by the end of 2023.
“Our last raise was just $2 million in 2017 to fund our pivot. With that capital, we were able to grow 70% year-over-year and achieve profitability with around 30 employees,” said said Sedlet “With this much larger fundraising, we expect to grow even faster.”
Certainly, some investors, like Three Fish Capital, see the long-term potential in new-era staffing, hiring, and recruiting businesses. And 2021 was a banner year for HR tech, with $16.8 billion invested in the category globally. In the first quarter of 2022, Future of Work companies attracted more than $4.5 billion, setting the stage for another cash-rich year.
“HR technology has improved dramatically, with companies like Gusto and Rippling making huge improvements in how companies and employees manage employment for the permanent workforce. contractor, however, has yet to see a modern human resource information system (HRIS),” Brower said. [a] a transparent contract workforce and provides an excellent work experience for workers. »