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Investment News / Wed 6 Jun 2018

Exclusive: TalentPool raises $1m in growth funding

TalentPool, a recruitment platform for startups and SMEs, has raised $1m (£670,000) in a growth equity round.

The London-based company’s round was led by Niche Invest.

Rich McNally, chief research and investment officer, at Niche Invest, told UKTN: “We’ve been very interested in the automated recruitment space for a while now and our research revealed TalentPool’s platform as a clear segment leader.

“After several meetings with the founders and an in depth due diligence process, we’re confident that we’ve found one of tomorrow’s major disruptors to the traditional recruitment market.”

Simon Smith, the CEO at Niche Invest, said he had been impressed by TalentPool’s “robust, operationally effective platform and its strong team”.
“TalentPool has achieved impressive top line growth while continuing to focus on developing their matching technology. Hitting profitability last year proved the commercial viability of the model and made raising capital to ramp up investment in the tech a no brainer.
“We’re excited to come on board at this key moment as the business is poised to deploy their matching engine into new and larger markets. We look forward to working with Tom, Andrew and the team as they build the business to it’s full potential,” he continued.
Tom Davenport, the co-founder, told UKTN that alongside the ‘growing’ revenue generated by the business, the funding would allow him and the team to invest in the company’s underlying technology, while also fuelling its expansion from just serving recent graduates to more experienced candidates.

“We’re growing our tech team, with a particular focus on applying machine learning to our already large dataset and existing matching algorithms. We have our first data scientist joining us next month from the trading algorithms team of a leading bank.

“At the same time, we’re growing our investment in marketing as we expand into new markets. We’ll be spending across a range of digital and non-digital channels, both to expand our membership of 65,000 candidates and also grow our brand amongst employers,” he commented.

Davenport noted that him and the team had spent the past two years focused exclusively on matching recent graduates with startups and SMEs. Demand from clients and his ambition to serve more sectors and experience levels has resulted in the company looking to disrupt the more experienced hires market.

“We’ll be on-boarding our first few thousand candidates in the coming months. Initially, we will be focussing on sales, marketing, account management and operations but will continue to add new functions monthly.”
It goes without saying that TalentPool is operating in a highly competitive market (fellow recruitment startup Debut raised more than £5m just weeks ago) with Davenport quick to point out that the main competition still lies with incumbents.
“Our main competitors are now traditional requirement agencies who have dominated this space for long time. We deliver a service similar to that of an agency but we automate the process.
“The first consequence of this is that we don’t ‘sell’ (this is where a traditional recruiter persuades companies to take candidates or vice versa). We just introduce companies to candidates who match with them on the platform – and it’s entirely their call whether or not to go ahead. The result is a much stronger retention rate and better – genuinely positive – experience for both sides.
“The second consequence of our automation is that we can pass on our efficiency savings to our clients. We charge a 8.5% fee while the recruitment industry standard is 20%. At the same time, and critically, good recruiters have a success rate of around 35%. This means that they are not paid for most of the work they do; so those who commission successful searches need to cover the costs of all the unsuccessful searches,” concluded the co-founder.