Calendly, the scheduling startup that landed with a splash last year when it raised a huge round out of nowhere at a $3 billion+ valuation, has made a name for itself for tools that are used by more than 10 million people to book appointments, arrange meetings and plan any event that involves two or more people making time for each other. Standing in the long shadow of Google, Microsoft and other giants that want to be the go-to platform for work and leisure life planning, now Calendly is making a move to step up its own pace. The company has acquired Prelude, a specialist in automating scheduling and organization around to job recruitment. Calendly is profitable, and this is its first acquisition.
Prior to the deal, Prelude — which originally launched under the less elusive name “Interview Schedule” — had raised just $2.4 million, from investors that included Sam and Jack Altman, Fuel Capital, Elad Gil and more. Financial terms of this deal are not being disclosed, but Prelude says that it has “hundreds” of customers, including One Media, Duolingo, Cloudflare and Samsara.
The acquisition underscores a few interesting trends and developments.
For Calendly, it’s a sign of how the company is focusing its sights and strategy as a business, by building out more specialized products for verticals, starting here with HR. This is a departure for the company, which quietly grew into a scheduling giant on the back of a very different approach: that of building a general-purpose toolkit that could be used by anyone and everyone. Which it was, especially during the pandemic when scheduled meetings not only held their own but also took on a ton of interactions that previously might have been serendipitous.
In the last couple of years, Tope Awotona, Calendly’s founder and CEO, said that company has been focusing less on individual users and more on enterprise users, with typical deals covering organizations with hundreds of thousands of users within them, another reason why the company now is in product expansion mode.
Awotona said that this might be its first acquisition, and first effort to carve out features catering to a specific use case, but it is unlikely to be the last.
While those moves will definitely help Calendly service the enterprise sector more comprehensively, it is also a way for the company to stave off competition from other scheduling services. The likes of Google have unsurprisingly built out more tools to work on its own Calendar platform to improve scheduling, and with those existing directly within calendaring apps themselves, and tightly integrated into other productivity and organizational tools like e-mail, making Calendly more useful in particular scenarios will be one way that it can hold on to users, and bring in more.
This is not a signal that Calendly is embarking on a buying spree: Some features will be built internally, Awotona said. In the case of Prelude, he described the automation software built by the company, and the team behind it, as a complete package that would have been much more challenging and time-consuming to replicate, so it made sense to pick it up and eventually integrate it into Calendly itself.
On the part of Prelude, selling up is part of a bigger trend of consolidation that we have been seeing in enterprise software. The line that tends to be drawn in software is often between features and platforms, where features may be essential or nice to have, but they ultimately might find their positions precarious or at least weakened if there are competing services that roll those features up with others, or if they are too reliant on too many other services to work as they should.
On top of this, there has been a major funding crunch, and so it’s getting harder for just about all startups to raise money. Whereas in the past a startup might have held on, raised more and used more time to grow their businesses (and valuations), these days the calculus might be leaning in favor of exits when they are presented. Combine this with the business outlook for smaller startups that either are strong feature sets, or have yet had the time to build themselves into bigger platforms, and you can see how a lot of M&A might be germinating these days.
But to be totally clear, in this case, Awotona said Prelude was not shopping itself around.
“They weren’t looking for a buy,” he said. “I reached out to them.” In fact, he said that he did so on the back of Calendly itself asking its own customers what more they wanted out of the product. Across different industries, and despite the economic trends, it seems like a number of them wanted better tools to manage recruitment, so that’s how Calendly trained in on the space.
The HR category overall has been an interesting one to watch over the last several years, and especially right now. If you consider that job listing boards were some of the earliest pieces of content on the World Wide Web all those years ago, you could argue that recruitment and the wider field of HR is one of the more legacy categories in B2B2C internet. That makes the category extremely ripe for new players to come in and improve what incumbents first created years ago. At the same time, there are some very specific tools that are used in HR and recruitment, such as applicant tracking systems. It’s a must that even new software built for HR teams still works with whatever is already being used.
Recruitment, specifically in some areas like technology, has been in a nearly permanent state of under-supply for years. On one hand, there seems to be a perpetual shortage of talent to feed the technology industry machine, which means those who are doing hiring want the process to be as fast (but as thorough) as possible. On the other hand, technical jobs in particular are famously difficult to recruit for because of the double challenge of not only testing candidates’ skills but then interviewing them, usually through several rounds of meetings, to further vet people and figure out if they will be good fits. And that’s something that has remained consistent, even when hiring has been squeezed, as it has been for several companies in tech, which seems to be shedding a lot of jobs currently.
This last piece of the puzzle is where a tool like Prelude fits in: For organizations that need to schedule a high volume of meetings for recruitment purposes, with all of the different interviewers that the process might entail, the idea is that the HR lead can create a full journey encompassing all of that from one place. Those who are giving interviews can be trained and organized, and then candidates are given single interfaces to sign up for interviews and view their schedules without a lot of back and forth to get there, with all of this in turn integrating with other productivity tools like application tracking systems. The idea is that this can cut down on the time needed to dedicate to figuring out all of the logistics by automating a lot of the process, not unlike Calendly but for a specific use case, in this case of recruitment interviews.
Calendly, which has now raised around $350 million (mostly from a single round in 2021), is not in the market to raise more money at the moment, Awotona said, but this Prelude deal is likely a good template for how the startup will be looking to expand its product in the months and years ahead.
“This acquisition presents a tremendous market opportunity with the amount of interactions and experiences modern companies have with their potential hires,” says Will Laufer, founder and CEO of Prelude, in a statement. “There’s a natural alignment here as our shared vision is to provide a comprehensive solution to recruiting teams with one integrated platform. Scheduling automation is really crucial to the success of any business team – and together, Calendly and Prelude will be the clear choice.”