Crossover investors — investors that typically focus on the public markets — have participated in a record 23 deals to HR tech startups in 2016, 1 deal shy of doubling 2015’s participation.
Using CB Insights data we dug into where crossover investors are placing their bets in HR tech. We define “crossover investors” as investment banks, hedge funds, mutual funds, asset managers, and other diversified financial services firms.
This report contains detailed information on:
- Crossover annual financing history
- Crossover quarterly financing history
- Crossover deal share by stage
- Top crossover investors
Crossover annual financing history
Crossover participation in HR tech deals in 2016 set a record with 23 deals worth approximately $363M in financing. Total deals in 2016 tied with 2012-2014′s combined deal activity and nearly doubled the 12 deals seen in 2015.
But 2016 fell well shy of 2015′s record funding year for rounds that included crossover investors. 2015 saw approximately $705M in funding, an unprecedented 254% increase from 2014. Much of that spike was due to Zenefits’ massive $500M Series C deal in Q2’15, which Fidelity Investments participated in. Despite falling short of 2015′s total, last year’s total disclosed funding involving crossovers, at $363M, easily surpassed 2014′s total.
The top deal in 2016 that included crossover investors was a $100M Series D investment in Q1’16 to SnagAJob, with participation from Invus Group. Other large deals with crossover participation included T. Rowe Price and Tiger Global Management’s investment in a $40M Series E in Q4’16 to GlassDoor and Silicon Valley Bank’s participation in a $40M Series C in Q1’16 to Hired.
Crossover quarterly financing history
Deal participation spiked in Q1’16 to a record 10 deals worth approximately $229M in funding. Q1’16 doubled the previous record set in Q2’15 for deals with crossover participation and tied 2014′s total deals. Q1’16 was also a record quarter for overall deals to HR tech, with 112 deals worth approximately $755M.
Deals with crossover participation dropped significantly in the quarters following Q1. However, deal count on a quarterly basis remained strong in 2016 when compared to previous years.
Top deals in the period are all mega-round (100M+) investments and include the $500M deal to Zenefits in Q2’15 mentioned above, a $110M Series C investment to Paycor in Q3’14 which included Goldman Sachs, and a $100M investment to SnagAJob in Q1’16 mentioned above.
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Crossover deal share by stage
In deal share terms, investments that involved crossovers skewed heavily towards mid-stage and late-stage rounds (approximately 84%) from 2012-2016.
Less than 10% of deals involving crossover investors were at the early-stage (seed/angel and Series A), 52% were mid-stage (Series B and Series C), and 32% were late-stage (Series D and E+).
Top crossover investors
The most active crossover investor from 2012-2016 was BPI France with investments to 4 unique HR tech companies.
Also at the top of the list are Goldman Sachs and Silicon Valley Bank, each with investments to 3 unique HR tech companies. Closely behind are Tiger Global Management, T. Rowe Price, Sigma Gestion, Octopus Investments, and Hillhouse Capital Management, all of which have made investments in 2 unique HR tech companies since 2012.
Goldman Sachs and Tiger Global Management were also the top crossover investors in 2015.
|Top Crossover Investors In HR Tech Companies 2012-2016|
|Rank||Crossover Investor||Select Investments||Unique Investments|
|1||BPI France||ED2, Manager de Talents, TalentSoft, Wizbii||4|
|2||Silicon Valley Bank||Hired, PeopleMatter, Work Market||3|
|2||Goldman Sachs||Paycor, Staff Finder, TalentSoft||3|
|3||T. Rowe Price||GlassDoor, Upwork Global||2|
|3||Sigma Gestion||Magency Digital, Wizbii||2|
|3||Octopus Investments||Healthcare and Services Technology Group, SyncHR||2|
|3||Hillhouse Capital Management||Doumi, FXiaoKe||2|
|3||Tiger Global Management||GlassDoor, Navent||2|
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