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HR market sees investment bump from COVID-19

New funding rounds and acquisitions in HR technology are on pace to top 2020's banner year. The HR market activity is being driven, in part, by pandemic-related needs.

Investment in the HR technology market is growing -- a trend recently illustrated by announcements from Limeade Inc., SAP and ServiceNow.

So far this year, 355 HR tech deals have closed; this number is on pace with 2020, which had nearly 700 deals, according to new report from Alkali Partners LLC, an independent investment bank. Deals constitute new funding rounds in startups or mergers and acquisitions.

The effect COVID-19 has had on talent management is helping to drive some of this investment, said Shane Hubbell, founder and managing director of Alkali Partners in Portland, Ore.

HR market vendors are adding capabilities to handle more global and remote hiring, as well as online learning tools, Hubbell said. Integrations are also on the rise, he added.

"It's going to continue to be a really good year," Hubbell said, "because companies large and small have had to react in a really meaningful way to COVID."

Another aspect of the strong market, according to Hubbell, is the interest from small- to midsize businesses in HR technology. Enterprise technology, such as tools for performance management, is beginning to see a higher uptake by the SMB market, he said.

"They need those solutions to manage employees in a remote environment," Hubbell said.

Limeade acquires TinyPulse

Recent HR market acquisitions illustrate some of the trends noted by Alkali's Hubbell.

Limeade Inc., an employee experience vendor in Bellevue, Wash., recently acquired TinyPulse, which provides employee well-being tools, for $8.8 million.

Number of deals in HR technology
The number of deals in HR technology firms represents the total amount of investments, such as funding rounds and merger and acquisitions as tracked by Alkali Partners. There have been 355 deals closed so far this year.

TinyPulse serves smaller, more midmarket firms, and the acquisition "expands our addressable market as a company," said Henry Albrecht, Limeade's CEO.

But TinyPulse also adds to Limeade's existing platform, bringing tools that detail input, feedback and reporting a manager and a team have over time, Albrecht said.

Overall, the tools of both firms "give employees an ongoing voice about what's going on in the company right now," Albrecht said.

About half of TinyPulse's 70 employees are based in Seattle, and the remainder operate out of Vietnam.

It's going to continue to be a really good year because companies large and small have had to react in a really meaningful way to COVID.
Shane HubbellFounder and managing director, Alkali Partners

Market moves by ServiceNow, SAP

Limeade is not alone. Last week, ServiceNow announced it had acquired indoor mapping firm Mapwize, based in Lille, France, for an undisclosed amount.

ServiceNow provides HR and facilities management tools designed to manage a return to office. Part of these capabilities is indoor mapping tools. ServiceNow already includes a mapping capability through another third-party provider in some of its products.

"With the acquisition of Mapwize, we will provide native indoor mapping capabilities for employees and visitors from their desktop or mobile devices," said Deepak Bharadwaj, vice president and general manager of employee workflows at ServiceNow, in an email.

On Monday, SAP said it had acquired the intellectual property of SwoopTalent for an undisclosed amount. The firm, which is based in Oakland, Calif., can integrate data from internal talent systems, regardless of vendor, with public data, such as social media data, to create a single view of employees. The integrated data can be used to match employees to internal jobs, projects, skill development and mentors, according to SAP.

SwoopTalent is now part of SuccessFactors and some of its employees have joined its engineering team.

Patrick Thibodeau covers HCM and ERP technologies for TechTarget. He's worked for more than two decades as an enterprise IT reporter.

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