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The shift from early stage point solutions to growth stage platforms
For every venture dollar put into HR Tech since 2023, Rippling took about 25 cents. Additionally, global HCM platform Deel logged a $300M secondary sale and hit a $1B annual revenue run rate. While these fast-growing companies have a lot of disagreements, they do agree on platform superiority. Early stage investment in the sector has been decreasing, suggesting that investors may be prioritizing proven platforms over new point solutions. The few companies that have raised large Series As have been in core HR segments such as payroll or benefits.
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Despite an overall slowdown in deals, valuations and round sizes have been stable across all stages. Time between rounds and markups are also stable.
Seed Stage Financings
Capital and deal volume have been steadily decreasing over time
2 companies raised at >$40M post-money valuations this quarter: Lace, an onboarding & productivity tool for CSMs, and Logistiview, a productivity platform for frontline workers
Deal sizes have stayed at about $3M with dilution in the mid teens. Few companies disclose seed valuations, making the dilution numbers less reliable
Series A Financings
4 companies raised $20M+ series A’s
