Flush with capital, HR technology is driving the future of work

Investors are pumping millions of dollars into new technology as HR leaders try to cut back on outdated workflow processes, like recruiting and payroll.
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Money doesn’t grow on trees—unless you’re an HR tech startup, that is.

As the HR function has expanded, demand for new technologies that allow HR leaders to do their jobs faster, automate routine processes like payroll, and support emerging priorities like DE&I has grown. So has the amount of money being poured into it.

New money. Venture capital investment in HR tech tripled to $12 billion between 2020 and 2021, and remained strong in recent weeks, with tens of millions of dollars invested in various startups.

  • Ashby, an AI-powered recruitment platform that schedules interviews and collects demographic information about candidates. It raised $21.5 million in Series B funding in September, according to TechCrunch. Since launching in 2018, it has raised $34.5 million from investors, including F-Prime Capital.
  • Meanwhile, Knoetic, a people analytics company that integrates different data sources to help chief people officers track trends, also announced a Series B round. After raising $36 million from EQT Ventures, its total funding since launching in 2020 reached $50 million.
  • In August, New York-based HiBob, the maker of an HRIS that facilitates various aspects of HR, from onboarding to performance reviews, raised $150 million in Series D funding from investors including General Atlantic and Bessemer Venture Partners. It has raised $424 million since launching in 2015.
  • ModernLoop, which streamlines the interviewing and hiring process for recruiters, raised $9 million in Series A funding led by Accel last month. The platform, which has raised a total of $12.1 million since its inception in 2020, integrates scheduling, tracks candidate sentiment, and manages and trains interviewers.

Looking ahead. Analysts expect the HR tech market to continue growing and believe it will be worth $38 billion by 2030, up from $23 billion in 2021. Davor Hebel, a venture leader with investment firm Eight Roads, predicts that remote and hybrid work will only push the industry forward. “We also don’t foresee the war for talent in certain segments and professions disappearing, so I would look for tools that can continue to drive retention and happiness of talent in companies,” he told TechCrunch.

Now, if only this new technology could read and respond to emails while we sleep—that would be money well spent.—KP

Do you work in HR or have information about your HR department we should know? Email [email protected] or DM @Kris10Parisi on Twitter. For completely confidential conversations, ask Kristen for her number on Signal.

Quick-to-read HR news & insights

Our HR newsletter delivers need-to-know industry news and insights to HR pros every weekday for free.