A strategic corporate VC fund set up this April by global HR services giant Randstad is looking to invest in startups working on the hard problem of matching people to jobs, and jobs to people, as well as coming up with more effective ways for employers to communicate with and motivate their existing workforce.
With so much digital data online there are more ways than ever for companies to track down potential candidates, which means ample opportunities for startups to think creatively about better ways to match positions and talent. While the rise of mobile devices offers the potential for far more effective employee outreach. All these are areas of interest for the Randstad Innovation Fund.
The size of the fund is around €50 million, and it’s making four to five investments per year, between the seed and Series A/B stage — usually with a co-investor and investing on the same terms as that co-investor. Its investments are typically sized between €1 million and €5 million. Specific areas of interest within its HR/recruitment target include social sourcing, online platforms, mobile solutions, gamification and big data analytics, it tells TechCrunch.
“People are not only on LinkedIn or have a resume but they are everywhere right now, so how can you access those people and get the data of those people who are blogging or on Facebook or on LinkedIn, so social sourcing is a very interesting area for us — how can you get access to and get information on these people,” said Randstad Innovation Fund managing partner Ilonka Jankovich.
Reaching out to candidates via mobile is also a hot area. “We have 500,000 people on the payroll every day as a company and we have to connect with them, with have to engage with them and mobile is very important in that. And that’s developing very quickly,” she added.
So far the fund has made four investments, two apiece in the U.S. and Europe. These four portfolio companies are mobile workforce management tools maker Gigwalk, and employee referral platform Rolepoint in the U.S.; and in Europe: Twago (Germany), a marketplace for freelance work; and recruitment platform provider VONQ/Qandidate.com (the Netherlands).
“We invested in two online platforms because it automates a part of our services — so it’s interesting what kind of services can you add on online platforms,” noted Jankovich.
She said the fund works closely with the startups it invests in, both to contribute to their growth and to learn from their ideas — trialling their technology within its own business before it makes an investment decision.
It’s possible Randstad may acquire some of the startups it invests in but Jankovich said it expects to do so for only a small proportion. “We really invest as a financial investor so we don’t ask for any extra rights in the future, so we don’t have the right of first refusal or anything,” she added.
In terms of where the best HR startups are being built, there are of course lots of interesting candidates in Silicon Valley but Jankovich said Randstad’s global reach gives it the ability to track down what she dubbed the “small diamonds” in local markets.
“We try to map the markets and see what kind of companies are out there and which are providing the best technical solution, best service because it’s always a combination of technology and the offering,” she added.
So what is Randstad looking for in a startup? A great team is inevitably top of the list for this HR giant, along with a firm idea that’s already powering a growing business. So nothing too early stage.
“We always look for the best people, that’s very obvious because we are in the people business that’s the first thing we concentrate on and that also makes a venture successful or not. Then we also look at the technology of course. And before we consider investing we also pilot the product or service within our organisation, which is of enormous value,” said Jankovich.
“We have a few investment criteria. It should be growing rapidly. There should be revenue… Because we are such a large organization then if you want to work with us you have to know what you are offering. There has to be some traction, there should be some client cases, where clients give references… It doesn’t have to be perfect, because nothing is perfect, but at least it has great potential.”