HR Tech News Analysis – February 2019 Amol Pawar, March 27, 2019June 23, 2023 When I closed the January 2019 HR Tech news analysis, I predicted that 2019 will cross the USD 6 billion mark . We have the mother of all deals in this month which is almost double that number. The future for HR Technology just got brighter and the industry is moving full steam ahead The Mother of All Deals In the world of HR Technology, 4th February 2019 won’t be forgotten easily. This is the day when Ultimate Software announced its going private. The company is being acquired by an investor group and offered a 32% premium over its weighted average price over the last 30 trading days. The deal pegged at USD 11 billion is one of the biggest in the HR Technology industry and indicates the value and upward potential this industry holds. The deal does come with a 50-day “Go-shop” period where Ultimate is free to look for an even better deal in the market. We are waiting! The reasons for the company to go private is the realization that it may not be able to report growth at the same pace which made it a blue-chip stock. The company claimed that it wants to focus on product innovations than focusing on market returns and this is the primary reason for them to go private. From either perspective, this deal seems to be setting the tone for 2019 for the HR Technology industry. More Funding Deals USD 200 Million is what K1 Investment management has put in Jobvite while also acquiring 3 companies – Talemetry, Role Point, and Canvas. The combination of the 4 best of breed companies will mean that business users can get an integrated solution. This kind of consolidation has been happening within the HR tech space in the past and this deal indicates it’s not showing signs of slowing down anytime soon. What could be referred to as the Linkedin for people without college degrees, Jobcase, raised USD 100 Million in growth funding. With an estimated 100 million registered members and 25 million unique active user visits per month, it is one of the largest recruitment marketplaces in North America. The problem of recruitment is not fixed yet. This deal indicates we will continue to see more niches explored and discovered. Strategic Alliances and Acquisitions Traditional consulting organizations like Mercer have been active on the HR technology circuit for a while. Mercer has an HR Tech incubator program launched in November 2018. It acquired Mettl in October 2018. In Feb 2019, Mercer is back in the news with its strategic partnership with workforce analytics firm Crunchr. This is an important deal as consulting is no longer just advisory but also getting things done using technology. The deal clearly highlights the changing expectations from consulting companies. These traditional companies are re-imagining themselves in the technology-driven world of work. In the world of technology with multiple possibilities, companies are increasingly seeking to strengthen their core. They choose to partner with others to build a comprehensive solution for their clients. Large enterprise companies like Workday are leading the path on this. In February, Workday announced a strategic investment in Beamery and made it a part of its partner program. With more than 100 software partners in 5 different levels, this is a comprehensive partner program in the industry. Culture Amp announced it’s acquiring Zugata thus creating a solution that combines award-winning performance management with employee feedback focused on culture. It’s consolidation within a specific category and indicates the headroom available within specialized sub-categories in HR Tech. Josh Bersin wrote about this acquisition highlighting it as an emerging trend on the future of employee engagement market. This is enough to prove its significance in the HR technology industry. What’s Next Second month in 2019 successfully breached the target of USD 6 billion. Let us see how far we go from here. In 2018, the average deal value was USD 135K. can 2019 surpass that? Let’s wait and watch. We are currently discounting the outlier deal of Ultimate for this purpose. The month of February has seen announcements by LinkedIn of integrating its tools onto a single platform. Google announced the launch of its Hire platform in the UK and Canada, first global locations outside North America. All these deals and activities indicate a heightened pace in 2019. This makes us believe and sense some more stellar news in the coming months. Stay tuned. Featured HR Tech
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