Disclaimer All research on startup and the whole investment memo has been done for personal use of Akim Arhipov.

General overview

RecrutiLab - Recruitment marketing ATS with visual pipelines and video recruitment tools

• easy collaboration with hiring managers
• software adapts to your recruitment process per role
• accelerate the hiring process with asynchronous video interviews
• easy to use + control

Addressable Global Market:

There are about 10m (and growing) recruiters worldwide, RecruitLab is aiming to address - 100k recruiters in 7 years of operations. Below you can see some actual numbers of the market size RecruitLab is tapping into:

1. HR Software Market size was valued at $ 15.59 billion to $24.04 billion in 2021 and is projected to surpass $33 Billion by 2028, growing at a CAGR of 10.10% from 2021 to 2028.
2. Applicant Tracking System (ATS) Market is estimated to be $2.3 billion in 2021  and reach $3.2 billion by 2026 worldwide.[1] 90% of Fortune 500 Companies are using ATS software to bring the talent to their companies.[2] The demand for the recruitment solutions is growing quickly among small to midsize companies as well where currently only 40-50% of the companies have ATS solutions.

Problem

• “Old school” way of reaching the candidate is perfectly explained in the “Post and Pray” term. Hence, recruiters are listing jobs on resources and are waiting to hear back from the candidate. Flow is time-consuming and inefficient.
• Traditional job boards don’t return suitable candidates. That’s why the number of applicant sources is increasing. And together with the latter the need for a single place where to collect and manage all candidates from different sources, because:
  • Around 90% of applicants are unqualified for the position they apply.
  • Applicants are waiting for the feedback. The missing feedback is the biggest threat for the employer brand. Recruiter ghosting is made public quickly and it’s damaging also for the recruiter’s personal brand.
  • Job advertising on social media is difficult for recruiters because they need decent landing pages for that and there’s a need to buy ads from social media. Ad management tools in FB and Linkedin are time-consuming to learn and deploy.
  • Fragmented and complicated recruitment tools make HR work difficult and inefficient for employers that are regularly hiring.
• Large enterprise segment (>1000 employees) dominated the market with 63.8% of the market in 2019. The enterprise ATS solutions such as those by Oracle and SAP are very expensive, and the cost of this software is generally prohibitive for companies with less than 500 employees. Among large organizations, the top perceived barriers to adoption (cited by 60%) is that “leadership will not commit to an investment in ATS.”
• Similarly, for SME’s the top reason (46%) for not adopting an ATS platform is „cost.“ However, due to the popularity of cloud-based solutions from new entrants on the market with their cost efficiency and accessibility, adoption of recruiting software by small and medium-sized enterprises is starting to increase dramatically.
• According to the statistics, only 15% of available candidates on the market are actively searching for a new opportunity. The remaining 85% are passive, waiting to be approached.
• In addition, recruiters have to manage different channels separately; hence workload is always only growing. There is a lack of automation within the field, and recruiters live under stress.