HR tech (2024)
Fewer humans, more AI
Last updated: 25 Apr 2024
Market 101
HR-focused startups counted among the big winners of the 2021-22 tech boom, raising colossal sums from investors. While this market has quickly consolidated, and the VC bets have slowed, companies’ spend on HR tools remains high. Of the 140+ companies in Munich-based Picus Capital’s portfolio, HR software-focused ones are “the most reliable,” founding partner Robin Godenrath told Sifted last year. “There’s never a month where we see our HR companies with €8m revenue and then the next month it's gone down to €1m in revenue. It's a very, very steady upward revenue line.”
A handful of payroll and HR software companies have become true giants. A trio of US companies — Gusto, Deel and Rippling — are worth more than $9bn, according to Crunchbase data. Europe’s biggest HR tech companies include Remote — valued at more than $3bn — and Germany’s Personio, backed by Picus Capital and valued in 2022 at close to $9bn. Investors show no signs of slowing their roll on HR bets: Barcelona-based HR unicorn Factorial raised $80m from General Catalyst earlier this month.
An eagerness to invest in HR tech owes to the complex and messy evolution of the post-pandemic office. HR managers are spinning more plates than ever. They oversee everything from recruiting, onboarding, training and maintaining a happy ship to performance management, conflict resolution, firing and exit management. As businesses become ever-more hybrid and take on remote staff, HR has had to bring in reinforcements in the form of specialist tools that can steer them through the maze of rules needed for a global workforce, including totally distinct salary and tax laws.
HR teams are turning to tech because they need to do more with less manpower. A poll of 1,000 HR managers, carried out by software company Humaans in the US and Europe and published in March 2023, discovered almost 60% of people teams had experienced layoffs recently. That is despite over 50% of respondents saying the role of the HR professional has grown more complex. Startups are unsurprisingly touting generative AI (GenAI) as a great labour-saver. Stockholm-based Hailey HR recently introduced a GenAI feature that will help people teams draft policies, contracts and other agreements. Other bits of software have proved less popular. A highly contentious field of HR is “people analytics”, where tech is deployed to monitor staff. Rewind the clock to 2020 and you may remember how Barclays had to scrap a system that measured the length of time employees were away from their desks and how long they took to finish tasks.
More recently, as the downturn has trundled on, companies have been forced to take an axe to their SaaS subscriptions in a bid to save money. HR tech will always be among the last tools you'll find on the chopping block, says Goldenrath. “This is stuff that’s too painful to rip out of your company,” he says. “If you’re an all-in HR management solution, you’re the single source of truth".
Early stage market map
Deals
Key facts
$8.5bn
forecasted market size in Europe by 20321
77%
of companies in western Europe offer remote work options2
52%
of workers in the UK want to work in a hybrid setting3
Trends to watch
Will chatbots take over HR?
HR managers don’t always love questions like “where can I find X?”. In the future — if not presently at some companies — AI chatbots will be the first point of contact for random requests.
AI is already seen to be taking on a bigger role in applicant screening and recruitment. Companies like Dublin-based Talkpush can compile data from job boards and social media profiles to find and conduct initial outreach to relevant candidates.
London-based Metaview’s tool transcribes interviews, leaving a recruiter with 3-5 minutes of text cleaning to do post-interview — versus the 30 minutes it would normally take without the help of tech.
M&A uptick
We’ve seen a noticeable uptick in HR tech M&A activity in 2024. For example, global investment group Investcorp acquired a majority stake in Germany’s HR software site Veda in January.
Meanwhile, London-based Pento was snapped up by Israeli HR tech giant HiBob and — on the other side of the Atlantic — US-based HR tech Deel acquired German startup Zavvy for an undisclosed sum.
Removing bias from recruiting
Tech that promises to not only automate but also remove bias from the recruitment process has gained in popularity.
A standout is Amsterdam-based TestGorilla, which works with thousands of global employers and has raised over $80m from investors. Its big idea is to kill the CV and instead hire based on test scores. The company has a library of almost 300 tests that assess specific role-related and soft skills, such as coding, language proficiency, cognitive abilities, motivation and culture-add.
Competitors include UK-based Applied, which similarly offers anonymised, skills-based recruiting software, and Retorio in Munich, specialists in AI-powered video interviews and assessments.
Will enthusiasm for wellbeing last?
With employees the world over under strain to hit their revenue targets — often without additional help in the form of recruits — it can fall on people managers to ensure morale holds up.
Companies are trying different things to engage staff and boost wellbeing, from therapy apps to weekly yoga.
The next 18 months will prove to be a good acid test of how essential such offerings that companies have invested in are for their workforce, with many already swinging back towards austerity and cutting back.
Startups tracked by Sifted
Sifted take
The spread of AI and other tech tools is turning HR into an analytics game. Future people managers will need to decide how to interpret data and how those interpretations ultimately affect workers. Algorithms, in other words, will help — and perhaps also hurt. There will surely be occasions when HR managers are better off leaving the tech to one side altogether and tackling issues the old fashioned way.
Rising stars
A customisable recruitment platform that prioritises skills tests over CVs cofounded by Maxime Legardez Coquin and Paul Louis Caylar. Maki People raised €6.2m in 2021 and the round included investors such as Kima Ventures Global Founders Capital, Frst, Secret, Founders Future as well as various angel investors.
Round
Seed
Valuation
Undisclosed
Date
2021
Size
€6m
Hiring platform that allows you to source candidates, analyse interviews and automate the reference process.
Round
Seed
Valuation
Undisclosed
Date
2022
Size
€6.8m
A professional coaching platform that enhances accessibility to career growth, Bloom was founded by Al Crane, a multi-exit entrepreneur who previously sold Hero to Klarna for $165 million in July 2021, along with successful entrepreneur Jamie True.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€9m
Compensation management platform, helping mid‑market companies to make salary decisions.
Round
Seed
Valuation
Undisclosed
Date
2022
Size
€6.9m
Early stage startups to watch
50inTech
D&I and anti-harrassment
€1.5m
€1.5m
-
Aivy
Hiring
Screening & interviewing
€1.8m
€1m
-
All Gravy
Retention
Wellbeing
€3.2m
€3.2m
-
Alleo
Retention
Wellbeing
€3.2m
€2.7m
-
Apryl
Retention
Wellbeing
€4m
€4m
-
Bloom
Career development
€9.1m
€9.1m
-
BlueQuo
Flexible work
€2m
€2m
-
Breakroom
Hiring
Job portals & networks
€8.6m
€6.4m
-
CareerOS
Career development
€1.1m
€1.1m
-
Careloop
Hiring
Job portals & networks
€2m
€2m
€3.1m
Collective.work
Flexible work
€7.3m
€7.3m
-
Crew
Hiring
Screening & interviewing
€2.1m
€2.1m
-
Culture Shift
D&I and anti-harrassment
€3.4m
€1.8m
-
CV Wallet
Hiring
Screening & interviewing
€1m
€1m
-
Empion
Hiring
Screening & interviewing
€9m
€6m
-
Equalture
Hiring
Screening & interviewing
€6.9m
€2.5m
-
Fairsight
Hiring
Screening & interviewing
€2.2m
€2.2m
-
Feats.
Flexible work
€3.1m
€2m
-
Figures.hr
HR Operations
€8.6m
€6.9m
-
Gigged.AI
Hiring
Job portals & networks
€3m
€1.9m
-
greenworkx
Hiring
Job portals & networks
€1.8m
€1.1m
-
Hailey HR
Flexible work
€6.2m
€2.2m
-
HiPeople
Hiring
Screening & interviewing
€6.2m
€2.5m
-
HirePort
Hiring
Job portals & networks
€1.4m
€1m
€5m
HR Bot Factory
HR Operations
€1.6m
-
-
Hyrd GmbH
Career development
€1.1m
€1.1m
-
Intrro
Hiring
Job portals & networks
€2.1m
€1.9m
-
JOBTECH
Hiring
Job portals & networks
€7.4m
€6m
€33m
Jomigo
Hiring
Job portals & networks
€1m
€1m
-
Kenjo
HR Operations
€15.6m
€8.8m
-
KLARA
HR Operations
€5.9m
€4.7m
-
Kollabo
Hiring
Job portals & networks
€2.8m
€2.2m
-
Konfir
HR Operations
€4.2m
€2.4m
-
Layan
HR Operations
€1m
€1m
-
Lynx Educate
Career development
€3m
€1.4m
-
Maki People
Hiring
Screening & interviewing
€6m
€6m
-
Muzzo
Hiring
Job portals & networks
€2.1m
€2.1m
-
MVP Match
Hiring
Job portals & networks
€5m
€5m
-
Networkme
Career development
€1.9m
€640k
-
nilo health
Retention
Wellbeing
€8m
€8m
-
People Force
HR Operations
€2.9m
€1.8m
-
Quan
Retention
Wellbeing
€3.6m
€1.5m
-
Recruitroo
Hiring
Job portals & networks
€1m
€1m
-
Reflect
HR Operations
€2m
€2m
-
Retorio
Retention
Training and development
€11m
€9m
-
Rolemapper
HR Operations
€4.6m
€2.5m
-
RSight
Hiring
Job portals & networks
€990k
€150k
-
Screenloop
HR Operations
€9.1m
€6.8m
-
Settly
Retention
Wellbeing
€6m
€6m
-
Shakers
Flexible work
€7.5m
€6m
-
SkillLab
Career development
€1.5m
€1.5m
-
Spectrum.Life
Retention
Wellbeing
€8m
€5m
-
Spotted Zebra
Career development
€10.9m
€9.2m
-
StaffCircle
HR Operations
€6.4m
-
-
StepsConnect
Hiring
Job portals & networks
€1.6m
€1m
-
Teamdash
Hiring
Screening & interviewing
€2.2m
€1.9m
-
Teamed
HR Operations
€3m
€3m
-
Tengai Unbiased
Hiring
Screening & interviewing
€3.2m
€550k
-
TestGorilla
Hiring
Screening & interviewing
€73.8m
€63.6m
-
The Selection Lab
Hiring
Screening & interviewing
€1.5m
€1.2m
-
Vault Platform
D&I and anti-harrassment
€11.3m
€7.5m
-
Virtual Internships
Career development
€15.3m
€13m
€11.7m
Willo
Hiring
Screening & interviewing
€2.9m
€1.8m
-
WorkBuzz Analytics Ltd trading as 'WorkBuzz'
Retention
Training and development
€12.9m
€7.4m
-
Workfully
Hiring
Job portals & networks
€1.2m
€1.2m
-
Wrky
Retention
Training and development
€2m
€2m
-
Zero Gravity
Career development
€4.2m
€4.2m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Backed by investors such as Index Ventures, M12, EQT Ventures and Accenture Ventures, Beamery’s talent management platform empowers companies to understand the skills and capabilities they have at their disposal.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Headquartered in Munich and with offices in London, Madrid, Dublin, Amsterdam, Barcelona and Berlin, it will come as no great surprise that Personio’s founder Hanno Renne is planning on taking the company public in the not so distant future. Will 2024 be the year? Probably not.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
With more than 3,000 employees and backed by investors like Atomico, DN Capital, SoftBank and Kibo Ventures, Madrid-based Job&Talent is a recruitment marketplace that matches people with companies. In the US in 2023 alone, the company achieved growth of 22% YoY — generating $450m in revenue.
Sources
News articles
HR startup Rippling is in discussions to raise at a $13.4B valuation, up from $11.25B | April 2024 | TechCrunch
Remofirst raises $25M to take on Deel and Rippling in the global HR tech space | March 2024 | TechCrunch
How to save HR from itself | 2024 | Financial Times
Research reports
1 Europe Human Resource (HR) Technology Market Report by Application | 2023 | iMarc Group
1, 2 Essential Remote Work In Europe Statistics In 2024 | July 2023 | Zipdo
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