FEBRUARY 10 2021
Published in the Australian Financial Review
Employee onboarding and people management software company Enboarder is the latest company to join the growing swell of big tech sector raises in 2022, banking $US32 million ($45 million) from US investor NewSpring.
Former Reffind CEO Brent Pearson started Enboarder in 2015 as a platform that lets human resources teams create, deliver and track the experience of new hires. It has now expanded into “people activation” – helping HR teams build engagement and traction among staff with their programs, based on behavioural science principles.
Enboarder has doubled its revenue in the past year and increased its customer base by 130 per cent. Its customers include Deloitte, Dolby, Eventbrite, Hugo Boss, ING, McDonald’s and Shopify.
Mr Pearson said COVID-19 had provided a tailwind for the company after an initial slowdown in March 2020.
“It’s given us the mandate to really show our customers that these experience-driven workflows can help with a whole bunch of things,” he said.
“What we were finding was that HR had all these great ideas, but they couldn’t get any traction.
“With our platform ... you use the channel you want to use (be it Slack, Microsoft Teams, etc) and then rather than reading a verbose message, you get a consumer-like experience with video content. People prefer to watch a 30-second video than read an email. Then we make it interactive.”
‘The Great Resignation’
The shift to remote working has been a catalyst for companies to invest in their digital HR tools, but Enboarder has also benefited from the wave of employees changing jobs.
Data in December revealed that 4.4 million Americans had decided to leave their jobs in a move dubbed “The Great Resignation”.
“Getting the early experience right is hugely important,” Mr Pearson said. “It’s why I started it in 2015. I came across some research that looked at the correlation between the way you bring someone into an organisation and key metrics like retention.
“The initial experience and way you bring someone into an organisation affected first year staff turnover by 50 per cent.”
But even Enboarder is not immune to the resignation wave, with the company losing four engineers in quick succession last year. This, Mr Pearson said, prompted the business to sit down with each of its staff members and map out career development plans. Since then, it has not had any more resignations.
Enboarder’s latest raise comes less than a year after the HR tech company “topped up” its $11.9 million series A round, raising an extra $US5 million led by Next Coast Ventures.
Its new backer, NewSpring, has $US2.5 billion in assets under management, spanning from buyout funds to growth equity and mezzanine debt.
It has a portfolio of more than 180 companies and had 17 exits in 2021, including NuORder, Spiro Health and 360 Physical Therapy.
NewSpring partner Hart Callahan will join Enboarder’s board.
Enboarder’s raise comes on the back of a series of major funding rounds from local start-ups already announced this year, including Cyara’s $US350 million-plus raise, Milkrun’s $75 million investment from Tiger Global Management and Dovetail’s $89 million round.
Mr Pearson said the $US32 million Enboarder now has in the bank would give it a two-year runway before it needs to raise more capital.
“After a year we’ll assess again, but if we capture the category as much as we think we can, we’ll put the foot on the accelerator harder. At any time we can adjust the growth rate and cash burn rate,” he said.
The company competes against legacy technology giants such as SAP and Oracle, as well as $US60 billion software giant Workday.
Seeing these competitors as “big, lumbering gorillas”, Mr Pearson said not only did Enboarder remain two steps ahead of its larger rivals, its software could sit on top of these older platforms.
“We’re also seeing a lot of new best-of-breed entrants and that’s validation that this is a really hot category,” he said.