Sending in a resume is the main way a person hopes to get noticed for a job. But a startup out of Amsterdam called TestGorilla is today announcing $70 million in funding for a very different kind of approach: It has built an assessment platform that can be used to screen for a wide range of job categories, verticals and skills, and it says its approach is more effective and more equitable than when the initial screening is done via CVs.
The funding, a Series A, is being co-led by Atomico and Balderton Capital; and it’s coming about a year after TestGorilla raised $10 million in a seed round from Notion, Partech, and CapitalT. TestGorilla is not disclosing its valuation, but in two years of operations, the company has amassed 5,300 customers — including big names like H&M, Sony, PepsiCo and Oracle — that are selecting from a library of some 220 assessments, covering both hard skills such as a particular coding language or accounting program; and soft skills like communication, attention to detail and “culture add.”
“We strongly believe that you have to look at different things when considering job [and recruiting] success,” said Wouter Durville, the CEO who co-founded the company with Otto Verhage (COO). “Does this person know about coding? Okay great, but what about other motivations? We really see this as a first step. The assessment first, the CV second,” once the group is smaller. And for an even smaller group, a job interview, he added.
The gap in the market that TestGorilla is addressing has been a tough one to tackle in HR. For decades, the recruitment market has been hooked on resumes as the first point of entry for people applying for work. But it’s a game of diminishing returns: the more popular or specialized the job, the less effective resume screening becomes for the recruiter. It’s impossible (not to mention exhausting) to read between the lines, and for people to stand out, when each CV looks virtually the same as the next; or even worse, when CVs basically look the same except one might have detail of, for example, attending a more prestigious university — letting bias creep into the process.
This is something that Durville encountered directly himself: He and his wife had moved to Barcelona, Spain from Amsterdam after starting a social enterprise, a handmade rug business, in 2012. After the move, the company started to expand and they looked to hire people. The economy being what it is, Durville and his partner suddenly found themselves fielding hundreds, and then thousands, of resumes for roles in customer support, finance and related roles.
“We had no recruiting department, and we knew we were missing out on a lot of great talent,” he said. “We thought there must be a better way to do this. And that’s how the idea was born.”
The company first started with building tests of its own, and gradually improved its tooling and expanded its scope. The rug company is still operating today, although with TestGorilla taking off, the plan is to wind it down.
A number of companies have embarked on building out assessment tools for specific areas of expertise — for example, Turing has devised screening tests, but they are focused on technical/CS/engineering jobs — but what is interesting about TestGorilla is the company takes a more agnostic approach for testing some skills, complementing that with more specific skills assessments.
TestGorilla tackles that with a double strategy: It employs both technical and operational teams to build and run the business, but it also crowdsources experts who work with the startup to build tests in their particular areas of expertise. These experts in turn earn a cut each time their tests are used.
This is one large area where the funding will be going: The plan is to expand TestGorilla’s library by another third — 100 more tests — by the end of 2022; and to hire 100 more people. It will also be building more and deeper integrations with the other tools typically used by those who run hiring processes, including application tracking systems, recruitment platforms and job boards and more.
Apart from the fact that this provides a more practical way for companies to start to screen for people who might be better fits for roles, simply by automating the first stage of that process, it’s also, the company argues, a far more equitable approach that helps remove the potential for bias when hiring. It’s indeed a compelling idea that everyone — Stanford grad going against a self-made individual who didn’t go to a top-shelf school — has to take the same assessments to figure out not just skills but also possible culture fit, and that the outcome of who comes out better in that assessment might surprise you.
That, plus the ability for the company to provide more efficiency to hiring especially in distributed teams, are two facts that swung the deal for investors.
“Finding the right people is increasingly challenging for even the world’s best brands, and the pandemic has opened employer eyes to huge untapped pools of global talent,” says Atomico’s partner Luca Eisenstecken, in a statement. “TestGorilla is seeing incredible growth with its automated, data-driven approach to solving this problem. And they’re doing this while delivering a fairer hiring process based on skills rather than resumes, eliminating the biases that prejudice decision making.”
“Our portfolio companies hire more than 10,000 people a year and across the board, they have been looking for ways to remove bias while giving candidates the best hiring experience. It’s clear that traditional hiring practices have failed on both these fronts, and that this has only been exacerbated by COVID-19 and the rise of remote hiring,” added James Wise, partner at Balderton Capital. “We’ve already seen TestGorilla become wildly popular within our portfolio as a more effective and fair way to identify people with the right skills for the role, and we’re excited to support the team on their mission to end the era of CV-based candidate screening.”