Today, K1 Investment Management (a private equity firm based out of Los Angeles) invested over $200 million in Jobvite. This funding will be used to acquire three distinct (and notably different) talent acquisition providers: Talemetry (Recruitment Marketing Platform), Rolepoint (Employee Referrals), and Canvas (Candidate Communication and Text). Each provider offers a unique set of products and capabilities that when (and if) integrated will provide one of the most robust talent acquisition suites available in the market.
Without diminishing the value of Rolepoint and Canvas, this acquisition is significant for two main reasons:
- Jobvite: Jobvite is here to stay. This announcement puts to rest any rumors about the future of Jobvite as an ATS and its’ staying power in a competitive market. Jobvite’s customers can expect more products, services, and support over the next few years.
- Talemetry: This acquisition is the first significant announcement in the recruitment marketing landscape and it will not be the last. With many of these providers looking for an exit, is the future of recruitment marketing in a stand-alone solution or an integrated suite (ATS and Recruitment Marketing)? My bet is on the latter.
The ATS market is no stranger to acquisitions. In fact, it has gone through two major waves of acquisitions in the past 15 years. The first in 2005-2006 with the acquisitions of Virtual Edge by ADP and BrassRing by Kenexa. These providers were looking to complete a broader vision of their talent management suites. Smaller companies such as Cytiva (by Taleo) and HodesiQ (by Technomedia) followed suit a few years later. The second wave was in 2012 with the acquisitions of Taleo by Oracle, SuccessFactors by SAP, and Kenexa by IBM. These larger ERP companies were looking at checking a box for recruitment technology. What followed was a de-prioritization of talent acquisition and very little innovation or product development.
This most recent announcement could spark the third-wave and possibly, the most significant. In this case, talent acquisition is not a piece of the puzzle. It is not an extra module that is getting acquired to fill some larger HCM story. In the case of this acquisition, talent acquisition IS the story.
Below are my early thoughts on what we know at this point, what we don’t know, and what this means for the market.
What We Know
- Integration: In the short-term, K1 plans to keep the four providers separate with their own product, sales, and marketing teams. Each of these entities will roll-up under Jobvite with Dan Finnigan as the CEO. The goal in the long-term is to have an integrated platform.
- Enterprise: Talemetry has been very successful at serving the global enterprise market through strong leadership and a product that was originally built for integration with Oracle customers. It is the unsung hero of the recruitment marketing world with high utilization and 70% year over year growth. It is the provider that can help support enterprise growth.
- Services: Jobvite has strengthened its’ services and customer support over the past few years. Ultimately, services will be under a shared entity but it will take time and a commitment to the customer.
What We Don’t Know
- Oracle Integration: Questions may arise around the future of Talemetry’s close partnership with Oracle. Overall, it should not have a major impact since Talemetry integrates with many of the ATS providers including Workday, iCIMS, and PeopleFluent. And ultimately, customer requests tend to drive partnerships more than providers’ decisions.
- Timeframe: Acquisitions take time. As a result, delays can impact product strategies, support, and resources. Customers will not know the long-term goals until some of the short-term objectives have been met.
- Target Customer: These providers serve different markets. Although there is some overlap, only time will tell where this new entity will thrive. What we do know is that the emphasis will be expanding in the enterprise market.
What It Means
This acquisition has the potential to change the talent acquisition landscape for a few reasons:
- It will put pressure on other stand-alone recruitment marketing providers that are looking to get acquired or fearful that they won’t be able to compete against a larger firm. We can expect to see more acquisitions over the next year in recruitment marketing.
- Providers that play in the larger ecosystem (such as Rolepoint and Canvas) may also get acquired by ATS companies or talent acquisition suite companies. These types of acquisitions can leave customers feeling uncertain about future investments in third-party providers.
- ATS companies will need to enhance their capabilities. Most of these providers have some type of lightweight CRM in place. They will need to enhance these products or make future acquisitions. Expect more and ask for more from your existing providers.
It is an exciting time to be in talent acquisition. It is no longer a piece of the HCM puzzle. Solution providers feel pressure to do more and talent acquisition leaders are in a unique position to ask for more. We look forward to what the next few months will bring.