In its mission to democratize the recruitment industry, Australian start-up RecruitLoop has just closed a $500,000 seed round to establish its hiring marketplace in the United States.
Believing that there should be an easier, and more affordable, way to use recruiters to fill job vacancies, in January, 2011 Michael Overell quit his job as a McKinsey & Co analyst and, with Denis Zubkov, Paul Slezak, angel investor Garry Visontay, founded RecruitLoop. Their vision has received its first major financial validation from a geographically and professionally diverse group of investors; consisting of boutique Russian VC firm The Untitled VC, Singapore-based Microsoft executive Todd Forest, and a recruiter. Leaving his native Australia, Overell recently re-located to Silicon Valley to promote the platform to independent and freelance recruiters in America.
Overell claims the site offers recruitment services at 10 percent of the traditional cost, and undercuts the incumbents by using a series of tools and processes to commoditize the hiring process. This includes a zero-commission model where services are instead charged by the hour; the ability to pay for what you need; provide feedback on recruiters; and video-screening candidates.
Clients include Sydney crowdsourced design startup DesignCrowd and eBay, and some of the recent jobs completed on the website include hiring a data consultant in Sydney for a recruitment fee of $2,040; an API backend engineer in San Francisco, CA for a recruitment fee of $1,017; and a Ruby on Rails developer in Sydney for $1,450. The jobs were completed in less than twelve hours. Typically the salaries range between $40,000 and $250,000.
RecruitLoop, which emerged from Sydney’s first co-working space FishBurners, already has a network of over 75 independent recruiters across Australia, New Zealand, Dubai and the U.S. west coast, but has hired two new staff to boost its American presence.
“The injection of funds has allowed RecruitLoop to expand and tap into the North American market where we are gaining early momentum,” Overell said.
This is the first round of funding for RecruitLoop, which will primarily be spent on expanding the recruiter network and winning new customers. To date, it has been funded by revenue and an initial investment by the co-founders. The site largely attracts recruiters and customers through word-of-mouth — directly competing against other martketplaces such as Recruiter Exchange and KubeKonnect – but it could also face stiff competition from a range of cashed-up software developers that solve specific hiring problems.
Last month, U.K. firm Invenias raised $1.5 million for its Microsoft Outlook plug-in, so recruiters can manage and view candidate data from the email program; Another startup Entelo, launched last October, raised $3.5 million for its data analysis app which crawls social networks to identify new candidates; and last year social recruitment platform Zao.com raised $1.3 million to develop its app, which transforms employees into recruiters by leveraging social networks and gamification.