HR tech has gained significant traction over the past 5 years — but deals and dollars in the space saw a huge drop in Q1'20 as companies look to keep costs down amidst the Covid-19 pandemic.
Funding to HR tech — software tailored to human resources and operations — has swelled in recent years, with 2019 closing out at a record $6.7B.
However, 2020 has begun with a dramatic pullback, as Q1 coincided with the start of the Covid-19 pandemic. Already, investors may be anticipating weak demand for HR tech startup offerings as companies everywhere rethink their costs.
Funding to the space plummeted from $1.4B in Q4’19 to just $700M in Q1’20, representing to a 49% decline quarter-over-quarter. Deals also declined by over 30%. This amounted to the weakest quarter for HR tech since 2017.