Karat Raises $110M at $1.1B Valuation - Technical Interviewing Platform

The Competitive Landscape of Technical Talent Acquisition

Companies globally are accelerating their hiring processes to secure top technical talent before competitors do. The demand for efficient and scalable recruitment solutions is rapidly increasing.

Karat Secures $110 Million in Series C Funding

Karat, the provider of an “Interviewing Cloud” – an interviewing-as-a-service platform – has announced a $110 million Series C funding round. This investment values the Seattle-based startup at $1.1 billion.

Investment Details and Backers

Tiger Global led the funding round, having also spearheaded Karat’s $28 million Series B in 2019. Existing investors, including Norwest Venture Partners, 8VC, Exor, Base Partners, and Sempervirens Fund, also participated in this round.

Future Plans for Growth and Innovation

Karat intends to utilize the new capital to further develop its technology and data science capabilities. This includes enhancing interviewer training and refining the interviewing process for continuous improvement.

The company may also explore expanding its services beyond technical hiring, though technical roles remain a primary focus.

Current Client Base and Interview Volume

Karat collaborates with prominent companies such as Roblox, American Express, Intuit, Compass, and Wayfair. Mohit Bhende, Karat’s co-founder and CEO, reports that the platform facilitates approximately 500 interviews daily.

The Impact of COVID-19 on Virtual Interviewing

Prior to the pandemic, virtual interviewing tools were considered beneficial but not essential. The shift to remote work has dramatically increased the importance of platforms like Karat.

The Evolution of Live Technical Interviews

Previously, the superiority of live, technical interviews over standardized tests was debated. However, the changing work environment has highlighted the value of Karat’s approach.

The Rise of Professional Interviewers

Initially, Karat connected companies with engineers seeking side-gig interview opportunities. Now, the platform provides a primary income source for many interviewers, with some earning up to $250,000 annually as independent contractors.

Addressing the Engineer Shortage in Interviewing

Bhende emphasizes that engineers within companies are often too occupied with their core responsibilities to dedicate sufficient time to interviewing. This creates a need for specialized interviewing resources.

The Limitations of Traditional Testing Methods

Karat argues that relying solely on tests is an insufficient method for evaluating a candidate’s problem-solving skills and collaborative abilities. Furthermore, candidates increasingly desire direct human interaction.

Technology and Data Science as Scalability Drivers

The technology underpinning Karat’s platform is key to its scalability. The company leverages data from past interviews to train interviewers and improve candidate identification accuracy.

Protecting Confidential Company Information

Jeffrey Spector, president and co-founder of Karat, explains that the platform utilizes competency-driven modules to assess candidates. This approach allows interviewers to evaluate skills without gaining access to sensitive company details.

Tiger Global’s Perspective on Karat’s Potential

Scott Shleifer, partner at Tiger Global, stated that Karat’s Interviewing Cloud represents the future of engineering recruitment. He anticipates a widening gap between the supply and demand for engineering talent.

Note: A correction was made to the final quote from the CEO to clarify the statement to “they’re not learning.”