Hiring is the No. 1 thing founders waste their time on. Not because
it’s not important. Bad hires can be toxic. But because it’s
inefficient. Sourcing, interviewing and selecting candidates is tough
enough, and most recruiting tools can’t tell you where you’re burning
time or money.Yet Greenhouse can. After its 450 customers, including Evernote, Zenefits, and Venmo, told their investor how much it’s helping them hire, VCs came beating down Greenhouse’s door just seven months after it raised a $7.5 million Series A.
Now, Greenhouse has raised a $13.6 million Series B led by Benchmark and joined by The Social+Capital Partnership, Felicis Ventures and Resolute Ventures. Greenhouse CEO and co-founder Daniel Chait tells me his company is “not a unicorn yet,” so it’s not worth $1 billion, but it’s now valued at 2.5X its last round.
“Recruiting is a competitive priority,” Chait
says. “Everyone before us saw the issue as one of administration and
tracking. Lots of data and lots of resumes to juggle,” Chait tells me.
But it’s not some chore. Good hiring is make or break for startups and
critical to keeping costs low for big enterprises.
Greenhouse grows companies’ recruiting efforts in three
ways. It aggregates a company’s job candidate sources like referrals,
events, job boards, external agencies and social media into one hiring
dashboard. From there, companies can A/B test their job listings and
have their existing employees sent openings.
For interviews, Greenhouse helps businesses structure
their questions and how they’re asked so every candidate gets a fair
playing field, and scoring answers is easy with its decision-making
tools. Greenhouse makes it quick to compare candidates against each
other and the desired role, as well as assess how the company is doing
versus industry-hiring benchmarks.
With the extra cash, though, Chait says the goal is “making the platform smarter and more proactive.”
Greenhouse hadn’t burned through the previous $7.5 million
it had raised. “Far from it,” Chait tells me. Instead he says that “it
just seems that looking at the growth trajectory of hyper-growth SaaS
companies that end up being super successful, they continue to raise
money.” Bringing Benchmark’s Matt Cohler onto its board should aid
Greenhouse, too.
Chait tells me he has three big plans for the new $13.6 million:
- Platform infrastructure – “We’re moving beyond startup mode. We have lots of senior businesses on the platform and lots more coming. We need security audits, internationalization, and infrastructure. It doesn’t sound super exciting but to our customers it is. This data is super sensitive, so for us to compete and win for international firms or companies 5,000 to 10,000 employees in size and larger, they need to see we made that investment.”
- Growth – “We’re hiring a bigger and more capable sales and marketing team. The company is starting to see the opportunity to step on the gas.” Greenhouse’s software-as-a-service requires a team to sell its subscriptions. The startup has 70 employees now but expects to double by year-end.
- A proactive product – “We want to make intelligent predictions, make the software automate where I should spend my next incremental time or money to get better candidates.”
It’s this last part that could give Greenhouse an edge on
old tools. Chait says “some are trying to make it simple, pretty and
modern. Some try to make it cheap.” But Greenhouse wants to enable
“recruiting optimization.”
Greenhouse co-founder and CEO Daniel Chait
“For example, you might find candidates are routinely
passing the first round of technical phone screenings but are failing
face-to-face interviews. Well, a face-to-face is much more expensive. We
can identify patterns of candidates that fail later rounds and suggest
ways to filter them out at earlier stages.” Greenhouse also wants to be
able to tell companies, “What questions are more predictive of
successful hiring?” or “Which interviewers are doing the best job of
selecting great candidates?”
While it’s already one-upped dusty recruiting software like Jobvite, there’s a new class of data-driven tools like Lever focused on giving hiring managers the maximum information to make each decision. Lever raised $10 million in an October Series A to go after Greenhouse.
And that perfectly validates Chait’s fundraising thesis for Greenhouse. SaaS winners keep raising to super-charge growth once they find product market fit, rather than let competitors creep up.