Tel Aviv-based startup Hibob Inc., the company behind human resources management platform 'bob', announced Thursday that it has raised $70 million in a series B round led by SEEK and Israel Growth Partners. The investment will enable Hibob to continue its global expansion with the goal of simplifying employer-employee communication and management in growing companies and helping them adapt to the new employment world. The company did not reveal its valuation but it is estimated to be significantly higher than it was for its previous funding round at the beginning of 2019.
Since it was founded in 2015, Hibob has raised a total of $124 million. All of its backers in the previous round, Bessemer Venture Partners, Battery Ventures, Eight Roads, Arbor Ventures, Entree Capital, Cerca Partners, Perpetual Partners, and Presidio Ventures participated in the latest round too.
SEEK is a publicly owned Australian company, founded by brothers Andrew and Paul Bassat, which invests in mature HR technology companies.
“We had been on their radar for quite a while and we had been in constant talks, including during the pandemic outbreak. The formal offer arrived this summer and they led the round, with Moshe Lichtman and Haim Shani’s IGP joining when we were oversubscribed,” Ronni Zehavi, Hibob’s CEO said in an interview with Calcalist. “Now we can expand geographically. We operate in Europe, the U.S. and Israel and want to extend our reach to many more locations. We have 1,000 clients and our growth rate is insane.”
The funding round comes after a difficult year for the company. At the start of 2020, the company found itself in the eye of a storm when a senior executive was accused of sexual harassment and the company was caught unprepared and was forced to cope with the fallout. This took place just as the company was forced to send 30% of its employees on unpaid leave when the Covid-19 outbreak hit Israel.
“In an act of courage and integrity, we left no stone unturned, inspecting and righting, every issue we found. The incident was treated gravely by the board and the management and across the entire company. It convinced our new investors, who knew about the case and witnessed our handling of it,” Zehavi said. “We established strict company guidelines and a steering committee to handle the topic and report to the board on it on a quarterly basis. We appointed consultants and managers, we added Hila Klein from Fiverr as an external board member. We didn’t miss or skip a single thing. We still feel deep regret for everything that happened.”
“Nowadays, we are in a different place as a company. In March, we sent people on unpaid leave and cut salaries. In October, we re-instated the salaries, some of the employees came back, while others moved on,” Zehavi said. The company currently employs 170 people, compared to 180 at the start of the year, and estimates that it will grow to 240 by the end of 2021. It is currently recruiting for 30 positions in Israel. “In March and April, the market was in turmoil and no one knew where things would land. In May, some of our clients were beginning to come to grips and companies were starting to recruit again, though not at the same pace. Since June and July and up until now, we are seeing increased growth in the use of our platform.”
“The world of HR technology has existed for decades. Companies for whom human capital is important, realize the importance of adopting technological solutions. We identified a market segment of mid-sized growth companies that employ several hundred to one thousand employees that didn’t have the tools. It’s a huge market that the big players don’t have access to. It is a $10 billion market where we have nearly no competition,” Zehavi said.
“Working from home created many management and recruitment challenges — the hybrid workplace, how to maintain employee resilience — all that changed in a period of weeks, and all at once we became the go-to platform for global growth companies,” said Zehavi. “This is the year that HR managers became a critical part of the organization.”
The company reported triple-digit year-over-year growth in 2020, and its clients include fast-growing companies such as Monzo, Revolut, Cazoo, Happy Socks, ironSource, Receipt Bank, Fiverr, Gong, and VaynerMedia. Its platform, bob, also closely integrates with third parties such as Slack, Microsoft Teams, and Mercer.
“Our investment philosophy includes investing in emerging HR SaaS leaders with platforms that deliver superior solutions, provide better value, and allow for an improved employee experience for scaling businesses”, said SEEK CEO and co-founder, Andrew Bassat. “Hibob has been on our radar because of its strong value proposition and impressive business growth. Hibob has a great team led by an impressive and experienced founder and has delivered an outstanding product to the market. We are pleased to join the board and be partnering with Hibob in their next phase of growth.”
“Building an HR platform suite is hard, and building it for fast-growing customers is even harder,” said Adam Fisher, Partner at Bessemer Venture Partners. “Hibob has done an exceptional job over the past year to serve ever larger businesses with an even more comprehensive platform. We are proud to have been involved since the seed stage and are excited for what lies ahead.”