HiBob raises $70M for its new take on human resources
Productivity software has been getting a major re-examination this year, and human resources platforms - used for hiring, firing, paying, and managing employees - have been no exception. Today, one of the startups that's built what it believes is the next generation of how HR should and will work is announcing a big fundraise, underscoring its own growth and the focus on the category.
Hibob, the startup behind the HR platform that goes by the name of bob" (the company name is pronounced, Hi, Bob!"), has picked up $70 million in funding at a valuation that reliable sources close to the company tell us is around $500 million.
Our mission is to modernize HR technology," said Ronni Zehavi, Hibob's CEO, who cofounded the company with Israel David. We are a people management platform for how people work today. Whether that's remotely or physically collaborative, our customers face challenges with work. We believe that the HR platforms of the future will not be clunky systems, annoying, giant platforms. We believe it should be different. We are a system of engagement rather than record."
The Series B is being led by SEEK and Israel Growth Partners, with participation also from Bessemer Venture Partners, Battery Ventures, Eight Roads Ventures, Arbor Ventures, Presidio Ventures, Entree Capital, Cerca Partners, and Perpetual Partners, the same group that also backed Hibob in its last round (a Series A extension) in 2019. It has raised $124 million to date.
The company has its roots in Israel but these days describes its headquarters as London and New York, and the funding comes on the back of strong growth in multiple markets. In an interview, Zehavi said that Hibob specialises in the mid-market customers and says that it has over 1,000 of them currently on its books across the US, Europe and Asia, including Monzo, Revolut, Happy Socks, Ironsource, Receipt Bank, Fiverr, Gong, and VaynerMedia. In the last year Hibob has had triple digit" year-on-year growth (it didn't specify what those digits are).
Human resources has never been at the more glamorous end of how a company works, and it can sometimes even be looked on with some disdain. However HR has found itself in a new spotlight in 2020, the year when every company - whether one based around people sitting at desks or in more interactive and active environments - had to change how it worked.
That might have involved sending everyone home to sign in from offices possibly made out of corners of bedrooms or kitchens, or that might have involved a vastly different set of practices in terms of when and where workers showed up and how they interacted with people once they did. But regardless of the implementations, they all involved a team of people who needed to be linked together and still feeling connected and managed; and sometimes hired, furloughed, or let go.
That focus has started to reveal the strains of how some legacy systems worked, with older systems built to consider little more than creating an employee identity number that could then be tracked for payroll and other purposes.
Hibob - Zehavi said they chose the name after the person who owned the bob.com domain wanted too much to sell it, but they liked bob for the actual product - takes an approach from the ground up that is in line with how many people work today, balancing different software and apps depending on what they are doing, and linking them up by way of integrations: its own includes Slack, Microsoft Teams, and Mercer and other packages that are popular with HR departments.
While it covers all of the necessary HR bases like payroll and further compensation, onboarding, managing time off, and benefits, it further brings in a variety of other features that help build out bigger profiles of users, such as performance and culture, with the ability for peers, managers and workers themselves to provide feedback to enhance their own engagement with the company, and for the company to have a better idea of how they are fitting into the organization, and what might need more attention in the future.
That then links into a bigger organizational chart and conceptual charts that highlight strong performers, those who are possible flight risks, those who are leaders and so on. While there have been a number of others in the HR world that have built standalone apps that cover some of these features (for example, 15five was early to spot the value of a platform that made it much easier to set goals and provide feedback), what's notable here is how they are all folded into one system together.
[gallery ids="2085416,2085417,2085418,2085419"]
The end effect, as you can see here, looks less like word salad and more interactive, graphic interfaces that are presumably a lot more enjoyable and at least easier to use for HR people themselves.
The importance for investors has been that the product and the startup has identified the opportunity, but has delivered not just more engagement, but a strong piece of software that still provides the essentials.
This is certainly not a Workday," said Adam Fisher, a partner at Bessemer, in an interview. Our overall thesis has been that HR is only growing in importance. And while engagement is super important, that opportunity is not enough to create the market."
The end result is a platform that has a significant shot at building in even more over time. For example, another large area that has been seeing traction in the world of enterprise and B2B software is employee training. Specifically, enterprise learning systems are creating another way to help keep people not only speed on important aspects of how the work, but also engaged at a time when connections are under strain.
Training, a SuccessFactors-style offering, is definitely in our roadmap," said Zehavi, who noted they are adding new features all the time. The latest has been compensation, sometimes known as merit increase cycles. That is a very complex issue and requires deeper integrations finance and and the CFO's office. We streamlined it and made it easy to use. We launched two months ago and it's on fire. After learning and development the are other modules also down the road."