A high demand for engineering talent in our digital world has driven companies that need to make these technical hires to cast their nets wider in the search for good people. Now, a company that has built a platform that it says helps companies do this in a more accurate and efficient way has raised a round of growth funding.
Karat — which takes on the process of technical interviewing on behalf of clients like Citrix, Roblox, InVision and the Chan Zuckerberg Initiative by connecting already sourced candidates with live engineers to interview, test and evaluate the candidates for the next step of the recruitment process — has raised $28 million in funding, a growth round that is being led by Tiger Global Management, with participation from previous backers Norwest Venture Partners and Joe Lonsdale’s firm 8VC.
The company is not disclosing its valuation, but this latest round brings the total raised to $41 million, and in the last round, Karat had a modest valuation of $55 million, according to data in PitchBook. Given that the company has grown by quite a bit since then — it tripled the number of interviews conducted last year and will triple again this year; and while it doesn’t disclose the total number of clients or interviews, it says the biggest will run 10,000 interviews in a year through Karat — I’m guessing the valuation is now over $100 million, but possibly lower than $200 million.
Karat is taking an interesting approach to a problem that many others are chasing: how best to leverage the growth of tech tools to improve the antiquated hiring process, which had been one of the earliest verticals to get the dot-com treatment (many flash-in-the-pan, and some huge online job sites being rife in the first dot-com boom), but has seen surprisingly little innovation since then.
Yesterday, we reported that LinkedIn has now notched up 20 million job postings — a number it claims makes it now the biggest job site for professional jobs in the world — but when it comes to more targeted searching, and then the very big task of how to handle the volume of inbound interest (alongside more proactive recruiting) and find needles in that haystack, there is still a lot more to be done.
One specific area close to TechCrunch’s heart is technical recruiting — finding the right engineers and others in adjacent fields that are central to the growth of tech companies. Startups like Hired are working on building better candidate pipelines, while Triplebyte is building online coding tests to help better screen and sift people to different job opportunities. Even e-learning startups like Coursera are eyeing up how they can fit into the mix to better connect people with jobs. But it’s not just startups sizing up the opportunity — Google is also stepping up its game (as is Facebook).
Karat, interestingly, is taking a slightly analogue approach to the problem of technical recruitment: it focuses specifically on pairing up human interviewers — themselves engineers — with the candidates, lists of which have been provided to Karat by the companies themselves. Those interviewing engineers might be working full-time elsewhere and doing this on the side, or more likely taking a career break and using this to stay busy in a relevant way.
Indeed, Jeff Spector, who co-founded the company with Mo Bhende, described one of the company’s leading interviewers, which he said typifies the kind of contractor — they are all contractors, not full-time employees — who provides interviewing services to Karat. This particular engineer is ex-eBay and travels around “in his van,” using a blur-out technique to interview from the Airbnb where he happens to be staying. This particular engineer-interviewer has done 2,400 interviews.
“They love the flexibility,” Spector said. These interviewers are sourced globally, he says, which makes it possible to conduct the video calls in a 24-7 format to suit people’s busy lives (most might already be in jobs) and multiple locations.
Those interviewers, incidentally, are not left to wing it themselves: they are given careful scripts, Spector said, which are crafted after detailed conversations with the client around what it being sought.
“There is not a lot of autonomy in this area,” said Bhende. “We have a team of content engineers designing interview questions and battle testing them and figuring out scoring before handing them to the interviewers.”
Those scripts include problem-solving segments that increase in difficulty, and the idea is that the two engineers, candidate and interviewer, work on them together.
This is one reason why Spector said the company does not have plans to expand to have AI-based interviews. The person giving the interview is encouraged to give hints if there are problems, because part of the assessment is to figure out how the candidate works in group and collaborative situations. It’s a very clever aspect, which I have to admit I didn’t think about but makes a huge amount of sense.
This is part one of the interview service. The second part is the write-up the interviewer provides, which is turned into actionable information for the company client to decide whether to take the candidate into the next level of recruitment.
The third part is a large raft of data insights that Karat amasses from across the body of interviews: these are provided in a consultancy-like service to help the companies figure out their hiring strategies, whether they are offering competitive salaries, whether they should be looking for different skill sets, benchmarking against competitors, and so on.
Longer term, the plan will be to expand Karat to cover other kinds of job categories: a Karat for finance or a Karat for sales, said Bhende. That’s the future though: even with the huge surge of interest in tech and computing, a chronic shortage of engineers continues to loom large, and that makes the chase to find the right people faster and more accurate a golden opportunity for Karat.