SmartRecruiters Raises $110M at $1.5B Valuation

The Rebound in Hiring Fuels $110 Million Funding for SmartRecruiters

The COVID-19 pandemic significantly impacted numerous industries and their respective workforces, leading to widespread furloughs and job losses. However, as nations transition back towards normalcy, many are experiencing a resurgence in hiring activity. Capitalizing on this trend, SmartRecruiters, a provider of recruitment software, has announced a new funding round of $110 million.

Series E Funding and Valuation

This funding, designated as a Series E round, values the company at $1.5 billion. Silver Lake Waterman is leading the investment, with participation from existing investors Insight Partners and Mayfield Fund.

Strategic Allocation of Funds

The newly acquired capital will be directed towards two key areas. Firstly, SmartRecruiters intends to expand its business reach, primarily targeting large enterprises. Clients such as Visa, Square, McDonald’s, Ubisoft, FireEye, Biogen, Equinox, and Public Storage already utilize their services, and the company aims to onboard additional global organizations.

Jerome Ternynck, CEO and founder of SmartRecruiters, highlighted a recent example: a client, Pilot Travel Centers, successfully scaled its workforce by 10,000 employees within a 90-day timeframe.

Addressing the "Great Rehire"

“This exemplifies the magnitude of the ‘great rehire’ that we are positioned to support,” Ternynck stated.

Investment in Product Development

Secondly, the funds will be allocated to enhance product development and expand the team. Specifically, SmartRecruiters plans to integrate greater intelligence into its platform. This will enable customers to identify optimal candidates for open positions and streamline recruitment processes through automation.

A Growing Market for Recruitment Technology

This area represents a significant growth opportunity, attracting attention from smaller startups as well. Dover, a company focused on similar solutions, recently secured a Series A funding round.

SmartRecruiters: A System of Record for Recruitment

Ternynck positions SmartRecruiters as “the Salesforce of recruiting,” meaning it provides a comprehensive system for large enterprises to manage the entire recruitment lifecycle, from candidate sourcing to final hiring decisions.

“Within the recruitment technology landscape, we function as the central hub,” he explained, noting that approximately 600 vendors are integrated with its platform – a testament to the industry’s fragmented nature.

Potential Synergies with Salesforce

(Salesforce, notably, is an investor in SmartRecruiters. While no immediate integration with its CRM platform is planned, the potential for future collaboration seems logical. Ternynck declined to comment on this possibility.)

Beyond Traditional Application Tracking Systems

While numerous application tracking systems (ATS) exist to manage candidate logging and progress, they often operate in isolation. Ternynck describes these as “the first generation” of recruitment software, which is now being superseded.

Driving Forces Behind the Evolution of Recruitment

Several factors are driving this evolution and SmartRecruiters’ growth. A key element is the broader “digital transformation,” accelerated by the pandemic, alongside the increasing adoption of cloud-based computing and advancements in big data management. The current IT environment offers numerous tools to navigate fragmentation and leverage available information.

The Strategic Importance of Talent Acquisition

Furthermore, there’s a fundamental shift in perspective. Recruitment and talent acquisition have become central to a company’s long-term success. Securing the right personnel fosters growth, while missteps in hiring can lead to stagnation or even failure.

Recruiting's Shift to Value Creation

“This funding round and our progress underscore the growing importance of recruiting for CEOs,” Ternynck asserted. He emphasized the distinction between simply hiring and strategically acquiring top talent, moving beyond a focus on cost per hire.

“This signifies a transition of recruiting from an administrative function to a value-added component, aligning with sales and marketing efforts,” he added. (This mirrors a similar approach adopted by Dover, which frames its recruitment strategy as “orchestration,” a term typically associated with sales software.)

Adapting to the Changing Landscape of Work

The pandemic has also reshaped the employment landscape. Remote work is more prevalent, and candidate expectations regarding jobs and their backgrounds have evolved, necessitating a more adaptable platform.

The Future of Work as a Catalyst for Investment

This broader shift – often referred to as “the future of work” – played a role in attracting this investment.

Silver Lake Waterman's Perspective

“Hiring talent and building human capital are more complex and critical than ever, and SmartRecruiters is well-positioned to help companies attract and secure top talent,” stated Shawn O’Neill, managing director and group head at Silver Lake Waterman. “Their scale and customer growth demonstrate strong leadership and a leading-edge platform. We are excited to support SmartRecruiters’ continued growth.”

Resilience and Growth During Challenging Times

Despite the layoffs and furloughs experienced by some industries, SmartRecruiters has maintained growth, even during the height of the COVID-19 pandemic. Bookings increased by 70% over the past year, demonstrating the evolving priorities within recruitment. This trend extends beyond SmartRecruiters, impacting companies like Taleo, Cornerstone, Dover, and even Salesforce, all vying for a share of this evolving market.