A new report on HRtechs, technology companies focused on Human Resources (HR), has revealed the segment is the third most active in Brazil, after fintechs and mobility, as well as the main companies in activity and startups to watch.
According to the study produced by innovation center network Distrito, there are 373 startups active in the HR space, which concentrated 11.6% of the capital invested in startups in 2019 – fintechs claimed 35.6% of the total investment last year, while mobility startups attracted 14.4%.
Since 2014, USD 473 million has been invested in HR startups in Brazil and, during that time, more than 90 investment rounds have taken place. These firms concentrated 11.6% of all the capital invested in startups in 2019, a year that was particularly interesting when it comes to that kind of startup. According to the study, this is due to the number of deals in that space, the largest being the SoftBank-led USD 300 million investment into corporate fitness platform Gympass exactly a year ago.
According to the study, the top 10 technology startups operating in the HR sector in Brazil, which was chosen based on funding raised and social media visibility, are 99 Jobs, Vagas, Kenoby, Catho, Gupy, Revelo, Xerpa, Ahgora, Sólides and Gympass. The vast majority of these companies (80%) are based in São Paulo, while 10% in Minas Gerais and 10% in Santa Catarina.
The survey also cited a list of 10 Brazilian startups focused on HR to keep an eye on in the coming years: Connekt, Pontomais, Flash, Beedoo, Zenklub, Qulture Rocks, Levee, Convenia, Matchbox, and Gama Academy.
Of all the startups active in the human resources space, 85.2% were founded less than a decade ago, according to the report. Companies focused on development and talent management represent most of the HR techs (42.9%), followed by recruitment (28.2%); HR core processes (25.5%), office services (1.9%); HR management systems (1.3%) and offboarding, which is the employee exit process (0.3%).
The Covid-19 outbreak has been one of the main agents of change within HR departments in Brazil, the research noted, adding there is an acceleration in the adoption of digital onboarding solutions while social distancing measures are in place. “Management of documents and processes that would take one month on average has gained speed and efficiency with HR tech platforms and, certainly, will have even more space from now on”, the research said.
The numbers reveal a gap in the sector, particularly around offboarding. According to the study, there is a lack of solutions focused on managing the departure of employees from companies – and therefore, an opportunity. “At a time when layoffs are on the rise, companies need to look at the [employee] shutdown process and how to make it less painful in a context of social distancing”, the study noted.
HR startups employ more than 11,000 people in Brazil, according to the report. Regarding the business model, most HR techs target other companies: 67.8% of them have a B2B focus and only 6.7% provide services directly to consumers (B2C). Of all the startups focused on HR, 25.5% work with both B2B and B2C audiences.
News Source: Forbes