RentArt, which australiabusinessblog.com previously described as a marketplace for “resume-kill” jobs, today announced it has raised $26.25 million in a Series B funding round led by Three Fish Capital with the participation of more than half a dozen “angel investors”. “. CEO Nick Sedlet said the money will be spent on product development and more than double the number of HireArt’s 82 employees in the coming year.
HireArt was originally founded in 2012 as an “appraisal company” – the startup searched and screened applicants for companies, much like an employment agency. But the co-founders — Dain Lewis, Eleonora Sharef, and Sedlet — found that many of HireArt’s clients hired its people by putting them on employment agencies’ payrolls as contractors.
“It was an ‘aha’ moment for us — here was a market that wanted our sourcing product and had an amazing unit economy,” Sedlet told australiabusinessblog.com in an email interview. “So in 2017 we ‘re-founded’ the company and launched our current model where HireArt both hires and hires the employees on behalf of companies.”
Prior to HireArt, Lewis was a senior business analyst at commercial real estate firm General Growth Properties – since acquired by Brookfield Property Partners. Sharef was a business analyst at McKinsey and Sedlet was a Goldman Sachs strategist.
Companies often use employment agencies to hire and hire employees who do not qualify as independent contractors. Agencies focus on recruiting candidates, but — as Sedlet puts it — they don’t pay much attention to the post-hire experience.
“As a temp client, it’s difficult to manage basic workflows, such as setting up a roster of employees, giving someone a bonus, or approving PTO. As an employee, the staffing industry provides only basic benefits, makes basic administrative tasks difficult, and certainly offers little support such as career growth and performance management,” Sedlet said. enable business and employee functionality and provide a work experience worthy of the value contractors bring to businesses.”
With HireArt, a hiring manager can ask employees to receive a curated shortlist of candidates and schedule interviews before making offers. Through the platform allows managers to perform tasks such as changing payroll rates, approving expenses, and preparing reports.
“A company like Meta has tens of thousands of contractors. A typical HireArt customer may have dozens or hundreds of contractors employed by a handful of staffing agencies,” Sedlet explained.
Sedlet portrays the staffing industry as a fragmented but huge opportunity, estimated are worth nearly $500 billion in the US alone. Tens of thousands of recruiting and staffing agencies are competing for a slice of the pie, but the biggest owns only about 7% of the market.
Since HireArt goes to market the way temp agencies do, it often competes with them for new assignments. But HireArt doesn’t list them as rivals. Rather, President and CRO Chris Brower said HireArt works with agencies to allow them to nominate candidates to its clients’ open positions and then hire those employees, sharing the revenue with the staffing partners.
“This gives our clients access to a huge pool of talent, all employed through a single platform,” Brower told australiabusinessblog.com via email.
HireArt’s clients include the aforementioned Meta, Carta, Zoox, owned by Amazon, and the ride-hailing platform Via. Several of those customers have announced layoffs or allegedly planned layoffs while macroeconomic headwinds are taking their toll. But Sedlet expressed confidence that HireArt, while not currently profitable, will be profitable by the end of 2023.
“Our last raise was just $2 million in 2017 to fund our pivot. With that capital, we were able to grow 70% year-over-year and achieve profitability with about 30 employees,” said Sedlet. fundraising campaign we expect to grow even faster.”
Sure, some investors, like Three Fish Capital, see the long-term potential of new-age staffing, recruiting and recruiting firms. And 2021 was a record year for HR technology, at $16.8 billion invested in the worldwide category. In the first quarter of 2022, futures-of-work companies attracted more than $4.5 billion, paving the way for a new year of big money.
“HR technology has improved dramatically, with companies like Gusto and Rippling making massive improvements in the way companies and employees manage permanent employment. However, the contract workers haven’t seen a modern Human Resources Information System (HRIS) yet,” said Brower. “HireArt makes managing [a] contract staff seamlessly and provide an excellent work experience to employees.”