Handshake Raises $80M at $1.5B+ Valuation - Diversity Recruitment
The Evolving Landscape of Graduate Recruitment
The process of job searching for recent graduates and soon-to-be graduates has undergone a significant transformation in recent years. Traditional methods like large-scale job fairs and “milk rounds” – where employers actively recruit on campus – are largely absent, at least for the time being.
These have been replaced by virtual career fairs, often facilitated by innovative startups such as Handshake. The company, dedicated to professional networking and graduate recruitment for a diverse student population, has recently announced a substantial funding round, demonstrating its success in adapting to the changing job market.
Securing Significant Investment
Handshake has secured $80 million in Series E funding, bringing the company’s valuation to over $1.5 billion. This round was co-led by Lightspeed Venture Partners and Spark Capital, with participation from new investors Coatue Management and Valiant Peregrine Fund, alongside existing backers.
The list of previous investors includes prominent firms like EQT, the Chan Zuckerberg Initiative, Omidyar Network, Reach Capital, True, Kleiner Perkins, and GGV.
The Impact of COVID-19 and Video Technology
According to CEO and co-founder Garrett Lord, the COVID-19 pandemic has profoundly impacted the company’s trajectory. A key development has been the introduction of a new video product.
This product powers virtual career fairs and interviews, with over 90% of university partners utilizing the video solution. It provides a crucial service, enabling recruiters and career services professionals to demonstrate tangible results in a challenging environment.
Rapid Growth and Market Momentum
The current valuation represents a considerable increase compared to the previous funding round, which also totaled $80 million last October. This growth coincides with significant momentum in the market.
Handshake has been consistently doubling its revenue annually and is projected to reach $100 million in annual recurring revenue. The platform currently serves 18 million students and young alumni from 1,200 educational institutions.
Expanding Reach and Inclusivity
This includes not only four-year colleges but also community colleges and boot camps, broadening the platform’s reach. Notably, 49% of U.S. college graduates from 2018-2020 secured job offers through Handshake.
The platform also boasts a robust network of 550,000 companies utilizing Handshake to connect with potential hires, including all companies within the Fortune 500. Increased corporate focus on diversity and inclusion is driving further engagement on the platform.
Addressing Underrepresentation in Hiring
Handshake’s approach stands out for its commitment to addressing significant gaps in the workforce, particularly concerning underrepresented groups in graduate recruitment. Historically, these roles have been disproportionately filled by white males and candidates from a limited number of elite institutions.
Founded by Garrett Lord, Scott Ringwelski, and Ben Christensen – three friends from a Michigan technical university – Handshake was created to dismantle these barriers and foster a more inclusive network, specifically targeting Historically Black Colleges and Universities (HBCUs) and a wider range of institutions.
A Complement or Competitor to LinkedIn?
Handshake’s emergence positions it as both a complement to and a potential competitor of LinkedIn. It serves as a valuable complement if LinkedIn successfully expands its professional networking and recruitment capabilities for the broader workforce.
However, it also presents a competitive challenge if LinkedIn struggles to effectively cater to younger users and individuals from historically underrepresented backgrounds – areas where Handshake has demonstrated particular strength.
Adapting to the Virtual Recruitment Era
Despite concerns surrounding the graduate job market during the COVID-19 pandemic, Handshake has successfully navigated the challenges by prioritizing virtual recruiting fairs and facilitating connections between users and potential employers.
Future Development and Investment
The newly acquired funding will be allocated to further developing the company’s technology and tools. However, Handshake does not intend to replicate the LinkedIn experience.
While exploring potential skills development opportunities, the company will focus on enhancing recommendations and potentially extending the duration of user engagement with the platform. The company leverages unique data points, such as educational background and job preferences, to provide tailored recommendations.
Investor Confidence and Long-Term Vision
Investors express confidence in Handshake’s focus and future development. Will Reed, general partner at Spark Capital, stated, “Doubling down on our investment underscores our belief that Handshake will not only help students build the skills and relationships they need to get their first job, but also expand into the $100 billion+ market of helping professionals advance their careers.”