Talent Acquisition Software 2021-2022 Industry Report

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Leading global technology-focused investment bank Drake Star today published its 2021-2022 Talent Acquisition Software Industry Report, which provides an in-depth analysis of the industry’s year-to-date M&A and funding activity, share price movements and sector valuations, and key industry news and emerging trends.

The report reveals that deal activity remained strong throughout the sector despite economic concerns, recording 151 transactions driven by product expansions, private equity investment, and consolidations. However, year-to-date private placement activity levels were lower than the previous year, recording $169M in YTD 2022 versus $804M in 2021. Separately, HR Tech industry valuations in 2022 were on par with 2019 levels. 

“Despite the current slowdown in some sectors, the talent acquisition software industry continues to greatly benefit from long-term tailwinds,” said Jim Holzer, a Managing Partner at Drake Star who specializes in HR Tech M&A advisory. “As talent demand remains well above pre-pandemic levels, hiring momentum continues at an accelerated pace due to high employee turnover and a secular shift to gig economy.” 

Jim Holzer

Private equity-based firms were among the most active buyers in the talent acquisition market in 2022, with noteworthy acquisitions including: 

·        Outmatch’s acquisition of Amsterdam-based volume hiring software Harver 

·        TA Associates’ investment into cloud-based talent acquisition solutions provider iCMS with existing investor Vista Equity Partners 

·        Employ’s acquisition of talent acquisition suite Lever 

Top 2021-2022 YTD fundraising deals in the talent acquisition software industry included: 

·        Softbank led a $220M Series E of Eighthold.ai, putting the pre-money valuation at $1.9B 

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·        B Capital Group led a $100m Series D of Phenom, putting the pre-money valuation at $1.4B 

·        ICONIQ led a $100m Series C of Gem, putting the pre-money valuation at $1.1B 

2022 concludes with a wide job gap of 10.3M job openings vs. 6M unemployed workers. According to Holzer, “A persistent supply and demand imbalance in the talent acquisition market can likely be attributed to an existing skills gap. The issue of candidates that lack the qualifications to fill open jobs could be remedied by long-term initiatives including existing employee training, partnering with educational institutions to improve the pipeline, and aligning educational curriculums with in-demand skillsets.” 

Download the Talent Acquisition Software 2021-2022 Industry Report here 

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