HR Tech vendor 15Five has raised $52 million in a Series C round led by Quad Partners. The round was supported by existing investors Next47, Origin Ventures, Edison Partners, Matrix Partners, Point Nine Capital, and New Ground Ventures.
It has been three years since the company last raised funds, over $30 million in a Series B round. What attracted Quad Partners at this time?
Connor O’Keefe, Principal at Quad Partners, commented: “We’ve been hyper-focused on partnering with companies that play a role in helping individuals at every age become empowered, engaged, and fulfilled. Education and personal growth is a lifelong journey.
“Now more than ever, companies are expected to facilitate organizational development by engaging employees, training managers, and enabling individual and business performance. What was compelling to us, and led to our investment in 15Five, is its cohesive mission and vision in building solutions that truly unlock the potential of each and every employee.”
That mission is now even more important for organisations. With the Great Resignation, ebbing organisations are still aware that talent retention and engagement are critical to their success. The current workforce wants their employer to demonstrate that they can deliver a career path, whether that is through promotion or education.
The 15Five portfolio of solutions aims to address this. They include:
- Engage: Engagement assessments and analysis
- Perform: Performance solutions
- Focus: Create, track and recognise individual employee goals
- Transform: Management training and coaching hub
Looking forward
With this new round of funding, 15Five is looking to further invest in R&D. The inference from the press release is that it will be looking to integrate deeper its four solutions connecting employee engagement with performance management and goals. It will also invest in the coaching solution, an area that companies are looking to adopt but often need technology to help make it consistent across the organisation.
The funding will also fuel new acquisitions. Its last acquisition was that of Employee Engagement vendor Emplify for $50 million in April 2021. Headquartered in San Francisco, it will be interesting to see whether the company looks to expand its reach internationally or expand further in the US, where it already has four offices.
David Hassell, CEO of 15Five, commented: “One of our founding beliefs was that the best companies in the future would be the ones that figured out how to motivate their people and unlock their potential, informed by the understanding that thriving humans create thriving businesses.
“And that’s still true. But how we do that has evolved. Our tools help HR leaders implement performance reviews, engagement surveys, and alignment around goals, with a through-line to training and coaching for frontline and first-time managers. We believe that managers are the keystone of high performance, not just in overseeing the work, but in helping to tap into the unique strengths and passions of every member of their team.”
Where does 15five fit?
15Five has built a customer base of over 3,500 companies, with customers such as Spotify, Hubspot, WPEngine, Pendo and the American Red Cross. Its focus is on small to medium-sized organisations of 100-2,500 employees. It is not a complete HRIS solution; it integrates with other HRIS and payroll solutions, including ADP, BambooHR, Namely, Workday and Gusto. Its products fill the gaps with best-in-class solutions that others may not provide.
What will be interesting to see is exactly how 15five use the investment and how quickly its updates come onto the market. While the company enjoyed a 90% revenue growth during 2021, it has been relatively quiet in the last six months. Its last product announcement was Career Hub in September. What is it working on now, and how quickly will it bring improvements to the market?
Enterprise Times: What does this mean?
15Five has an interesting set of solutions that rightly focuses on the mid-market. Enterprise platforms like Workday already have solutions that replicate much of the functionality it includes. Where it stands out is the difference it has made to customers in one of the key concerns facing business leaders: retention.
Todd Olsen, CEO of Pendo, commented: “According to our VCs, our retention is 5x higher than most companies they often see, especially in terms of the Bay Area.”. This is attributed to 15five, and that is worth noting.
