Workstream Secures $48M Funding for AI Recruitment Tool

The Challenge of Hourly Worker Recruitment

The difficulty of attracting and retaining talent isn't limited to large technology companies; businesses like Jamba Juice are also facing significant hurdles in filling open positions.

Workstream's Solution and Funding

Since 2017, Workstream, a San Francisco-based company, has been dedicated to addressing the unique recruitment needs of hourly employees. Demand for this employee segment is currently high, particularly for employers experiencing substantial turnover, as the labor market continues to shift in the wake of the pandemic.

Workstream recently announced a new financing round to expand its recruitment capabilities. The company has secured $48 million in a Series B funding round, co-led by BOND and Coatue, with participation from prominent investors such as Eric Yuan, CEO of Zoom, and Tony Xu, CEO of DoorDash.

Jay Simons, a General Partner at BOND and former president of Atlassian, will join Workstream’s board of directors as an observer. This investment follows a $10 million Series A raise led by Founders Fund just over a year ago.

Investor Interest and Differentiation

According to CEO and co-founder Desmond Lim, Workstream received 12 term sheets within a span of nine days. He attributes this strong interest to investors recognizing the startup’s distinct approach within the competitive recruiting software landscape.

Workstream has successfully differentiated itself by concentrating on text-based recruiting. Many front-line and deskless workers lack consistent access to company email, creating a disconnect. By communicating with candidates via text message, Workstream provides real-time updates to workers on the go.

This mobile-first recruitment strategy has also demonstrably reduced the time it takes employers to hire, by reaching candidates where they are already active.

Company Growth and Future Plans

Desmond Lim, whose parents both held hourly positions while he was growing up in Singapore, believes this approach is effective. In July alone, his company facilitated over 18,000 hires.

Workstream intends to expand its services to include hourly workers in the healthcare and retail sectors. Lim noted the significant disparity in software solutions available for different types of hiring.

“While a vast amount of software exists for hiring software engineers, there are comparatively few options for this segment of the workforce,” he stated. “This has undoubtedly contributed to our success in terms of team development, client acquisition, and fundraising efforts.”

Workstream has not publicly disclosed its revenue figures, but reports a “10X” increase in Annual Recurring Revenue (ARR) over the past year. The company currently serves 1,500 customers across 10,000 stores, including major brands like McDonald’s, Subway, and Jamba Juice.

Lim asserts that Workstream holds a 20% market share among the top 20 brands.

Focus on Engagement and Streamlining

Workstream positions itself as a comprehensive recruitment solution for hourly workers, but still relies on partnerships with approximately 25,000 job boards for initial job postings.

Lim emphasized that the company’s primary focus is on “recruitment and engagement,” accelerating candidates through the hiring process rather than solely focusing on attracting initial applicants.