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As Automation In Technical Recruiting Gathers Speed, Lytmus Raises $7.2M From NEA, Accel

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As tech companies compete more ferociously for hires across Silicon Valley, a layer of third-party technical recruiting companies is emerging to help startups quickly sift through qualified candidates without spending lots of time on interviewing. One of them, Lytmus, has been in the works for more than two years and has raised $7.2 million from NEA and Accel.

It was co-founded by Abhay Parekh, who started FastForward Networks, was an early general manager at Inktomi and also serves as an adjunct professor of electrical engineering and computer science at Berkeley.

“At every technology company, there’s an interview tax that engineering managers have to pay,” said Jeff Rothschild, who was a vice president of infrastructure at Facebook and is now working with Accel. “People want to limit the cost of interviewing and nobody wants to put 30 percent of engineering resources into finding new members for the team. The HR team tries to pre-qualify candidates. But what takes place in a coding interview is a terrible signal of how someone will actually perform.”

He said that typical technical interviews, which involve tasks like coding an abstract algorithm in 15 minutes, have very little connection to what engineers actually spend their time doing — which is debugging and analyzing existing code.

“The typical interview is both expensive and inefficient. It doesn’t expose you to the best candidates and the resource is so scarce that HR will focus you on candidates who have certain credentials,” he said. “We’re trying to attack this on each dimension. We want to lower the cost of interviewing and increase the quality of the signal.”

Lytmus is building what it calls a “flight simulator for technical talent.” It’s an immersive environment where hiring managers can see candidates operating inside of a web-based virtual machine, with an IDE, web browser, sample code and files and a standard problem prompt.

“We built this digital skills simulator that’s very versatile,” Parekh said. “It goes beyond standard coding challenges and allows a whole host of tasks. You can go way beyond algorithmic coding challenges.”

Inside Lytmus’ environment, candidates will have to dive into existing code and unpack a software’s design problems in real-time. Lytmus will passively collects logs of data on the backend so that hiring managers and recruiters can look in afterward to see how they did. The design of Lytmus is meant to mimic a live pair-programming test.

With Lytmus’ business model, the company only gets paid when the platform successfully places a hire. [Edit: The company sells its technical assessment platform and charges its users by the number and kinds of assessments it sends out. Both Pinterest and Okta pay this way. On top of that, there’s a secondary business model targeted at college students at hard-to-reach schools called “Showcase.” If Lytmus successfully places a candidate, they can pay by placement.]

The company is competing against a number of other startups in the space, including Triplebyte, which just raised $3 million and is closely tied to the entire Y Combinator family of companies, and Gradberry, another YC-backed startup.

“This whole technical assessment platform play is really exciting,” Parekh said. “It’s really cliche, but we’re democratizing talent. It’s possible now to find people who are really good regardless of where they’ve come from.”