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

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

Maki People

Screening & interviewing

Total funding

€6m

Paris, France
2021

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

Screenloop

HR Operations

Total funding

€9.1m

Canterbury, United Kingdom
2021

Hiring platform that allows you to source candidates, analyse interviews and automate the reference process.

Round

Seed

Valuation

Undisclosed


Date

2022

Size

€6.8m

Bloom

Career development

Total funding

€9m

London, United Kingdom
2022

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

Figures.hr

HR Operations

Total funding

€8.6m

Nanterre, France
2020

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

Paris, France
2018
Seed

1.5m

1.5m

-

Aivy

Berlin, Deutschland
2020
Seed

1.8m

1m

-

All Gravy

Copenhagen, Denmark
2020
Seed

3.2m

3.2m

-

Alleo

Amsterdam, Netherlands
2021
Seed

3.2m

2.7m

-

Apryl

Berlin, Germany
2019
Seed

4m

4m

-

Bloom

London, United Kingdom
2022
Seed

9.1m

9.1m

-

BlueQuo

Amsterdam, Netherlands
2021
Early VC

2m

2m

-

Breakroom

London, United Kingdom
2018
Seed

8.6m

6.4m

-

CareerOS

Barcelona, Spain
2023
Pre-seed

1.1m

1.1m

-

Careloop

Berlin, Germany
2019
Seed

2m

2m

3.1m

Collective.work

Paris, France
2021
Seed

7.3m

7.3m

-

Crew

Paris, France
2021
Seed

2.1m

2.1m

-

Culture Shift

Warrington, United Kingdom
2018
Early VC

3.4m

1.8m

-

CV Wallet

London, United Kingdom
2022
Seed

1m

1m

-

Empion

Berlin, Germany
2022
Seed

9m

6m

-

Equalture

Rotterdam, Netherlands
2018
Seed

6.9m

2.5m

-

Fairsight

Oslo, Norway
2022
Seed

2.2m

2.2m

-

Feats.

Copenhagen, Denmark
2018
Seed

3.1m

2m

-

Figures.hr

Nanterre, France
2020
Seed

8.6m

6.9m

-

Gigged.AI

Glasgow, Scotland
2021
Seed

3m

1.9m

-

greenworkx

London, United Kingdom
2022
Seed

1.8m

1.1m

-

Hailey HR

Stockholms kommun, Sweden
2020
Seed

6.2m

2.2m

-

HiPeople

Berlin, Germany
2019
Early VC

6.2m

2.5m

-

HirePort

Amsterdam, Netherlands
2021
Angel

1.4m

1m

5m

HR Bot Factory

Madrid, Spain
2019
Seed

1.6m

-

-

Hyrd GmbH

Frankfurt, Germany
2019
Seed

1.1m

1.1m

-

Intrro

London, United Kingdom
2019
Seed

2.1m

1.9m

-

JOBTECH

MILANO, Italia
2020
Series A

7.4m

6m

33m

Jomigo

Berlin, Germany
2020
Seed

1m

1m

-

Kenjo

Berlin, Germany
2019
Series A

15.6m

8.8m

-

KLARA

Paris, FRANCE
2019
Series A

5.9m

4.7m

-

Kollabo

Zurich, Switzerland
2018
Seed

2.8m

2.2m

-

Konfir

London, UK
2022
Seed

4.2m

2.4m

-

Layan

Paris, France
2020
Seed

1m

1m

-

Lynx Educate

Paris, France
2021
Seed

3m

1.4m

-

Maki People

Paris, France
2021
Seed

6m

6m

-

Muzzo

Paris, France
2020
Seed

2.1m

2.1m

-

MVP Match

Berlin, Germany
2020
Seed

5m

5m

-

Networkme

Lisbon, Portugal
2021
Seed

1.9m

640k

-

nilo health

Berlin, Germany
2020
Seed

8m

8m

-

People Force

Kyiv, Ukraine
2018
Seed

2.9m

1.8m

-

Quan

The Hague, Netherlands
2020
Early VC

3.6m

1.5m

-

Recruitroo

Dublin, Ireland
2022
Seed

1m

1m

-

Reflect

Paris, France
2022
Pre-seed

2m

2m

-

Retorio

Munich, Germany
2018
Series A

11m

9m

-

Rolemapper

Exeter, United Kingdom
2020
Seed

4.6m

2.5m

-

RSight

Paris, France
2020
Seed

990k

150k

-

Screenloop

Canterbury, United Kingdom
2021
Seed

9.1m

6.8m

-

Settly

Amsterdam, Netherlands
2019
Seed

6m

6m

-

Shakers

Madrid, Spain
2021
Seed

7.5m

6m

-

SkillLab

Amsterdam, Netherlands
2018
Seed

1.5m

1.5m

-

Spectrum.Life

Dublin, Ireland
2018
Early VC

8m

5m

-

Spotted Zebra

London, England
2020
Series A

10.9m

9.2m

-

StaffCircle

Leicester, United Kingdom
2018
Early VC

6.4m

-

-

StepsConnect

Alessandria, Italy
2019
Seed

1.6m

1m

-

Teamdash

Tallinn, Estonia
2020
Seed

2.2m

1.9m

-

Teamed

London, United Kingdom
2018
Seed

3m

3m

-

Tengai Unbiased

Solna kommun, Sweden
2019
Seed

3.2m

550k

-

TestGorilla

Amsterdam, Netherlands
2020
Series A

73.8m

63.6m

-

The Selection Lab

Amsterdam, Netherlands
2018
Early VC

1.5m

1.2m

-

Vault Platform

London, United Kingdom
2018
Series A

11.3m

7.5m

-

Virtual Internships

London, United Kingdom
2018
Series A

15.3m

13m

11.7m

Willo

Glasgow, United Kingdom
2020
Seed

2.9m

1.8m

-

WorkBuzz Analytics Ltd trading as 'WorkBuzz'

Milton Keynes, UK
2018
Series A

12.9m

7.4m

-

Workfully

Barcelona, Spain
2021
Seed

1.2m

1.2m

-

Wrky

Dublin, Ireland
2021
Seed

2m

2m

-

Zero Gravity

London, United Kingdom
2019
Seed

4.2m

4.2m

-

Europe’s success stories

Who early stage startups are up against

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

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

SeriesA

SeriesB

SeriesC

SeriesD+

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

SeriesA

SeriesB

SeriesC

SeriesD+

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.

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