Venture Capital News: Hired Raises $40M Series C Financing
SAN FRANCISCO, CA, Hired, an online marketplace for tech workers, has raised $40 million in Series C funding led by Lumia Capital.
According to Bloomberg, when Mehul Patel, Hired Inc.'s chief executive officer, began talking to venture capitalists last year for the company's latest fundraising round, they were no longer interested in hearing about market potential or user growth. Investors wanted to know when the job recruitment website would become profitable.
Patel tailored his pitch to highlight the ways he'd made his startup run more efficiently while showing that Hired would roughly triple annual revenue in 2016. He forecast a profit by early 2017. 'The conversation had really changed from a year ago,' he said.
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Patel said he eventually convinced investors to kick in $40 million at a valuation exceeding the previous round, which valued Hired last year at $200 million. He declined to specify the new number. The round was led by Lumia Capital, with participation from Comcast Ventures, Crosslink Capital, Sierra Ventures, and Silicon Valley Bank. Hired plans to expand into more cities and industries, which may include health care and law.
Hired faces many larger and more established competitors. CareerBuilder.com, Indeed Inc., LinkedIn Corp., and Monster Worldwide Inc. each control segments of the online jobs market. Monster generated revenue of $770 million in 2014. Although LinkedIn had a rough time last week, the site generated $862 million in just its last quarter. Hired said it has a 2016 revenue 'run rate' of $100 million. (The number is generally calculated by using the performance during one period as the basis to project a full year.)
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Hired is cost-free for job seekers, who create profiles listing their skills and backgrounds. About 4 percent of applicants are accepted. Recruiters from companies such as American Express Co., Comcast Corp., and Facebook Inc., pay to target those high-skill candidates and send them offers via e-mail. Since it began in 2012, Hired has expanded from tech workers in San Francisco to sales, marketing, and other professionals in 15 cities. The company has acquired two small startups in Paris and Melbourne to help it continue expanding internationally.
Patel said he's constantly looking for ways to cut costs. The startup has moved three times in as many years because it was unwilling to commit to a long-term lease. The chairs at the company's San Francisco office are mostly from Ikea. Patel said he bought a Herman Miller model for his home office from a startup that shut down during the first dot-com crash. 'That's still my office chair,' he said. 'It reminds me not to let things get too crazy.'
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