Searching for a job online can be an exercise in frustration. More than 60 percent of the roughly one-fifth of Americans who change jobs every year have abandoned an application because it was too lengthy, according to OfficeVibe. And it’s not just would-be employees who’ve had a tough go of it — two-thirds of organizations report having a difficult time recruiting for open positions.
ZipRecruiter eight years ago set out to tackle the problem with a solution that matches job seekers with relevant employers — and vice versa. The Santa Monica, California-based startup has since become one of the most popular employment platforms in the U.S. It says it’s helped over 1.5 million businesses find employees and received 430 million applications. And its investment partners think there’s room for expansion yet.
Today the company announced a $156 million funding round co-led by Wellington Management Company and returning investor IVP, which included participation by other existing investors. The round brings ZipRecruiter’s funding to date to $219 million, including a $63 million Series A financing round led by IVP in August 2014.
CEO and cofounder Ian Siegel said ZipRecruiter’ll use the capital to “further accelerate” its growth and ongoing projects.
“The primary reason we raised the money is so that we can double down on areas where we already have an advantage,” Siegel told VentureBeat in a phone interview. “We’re bringing the right job seekers to the right opportunities.”
He credits two key strategic moves with ZipRecruiter’s continued success: building out its artificial intelligence (AI) technologies and focusing on mobile.
“The massive investment we made in artificial intelligence a couple of years ago has propelled us to the forefront … in this area,” he said. “[And] we’re [invested] heavily in our mobile app. Roughly 70 percent of all job-seeking happens on a phone or tablet.”
To that end, he points out that ZipRecruiter’s Smart Employer app, which launched in December 2017, is the “number one rated app” in its category in Apple’s App Store. He adds that the company’s job-seeking apps for Android and iOS have similarly achieved high marks on both platforms.
On the machine learning front, ZipRecruiter now has 200 engineers developing AI-powered candidate matching and searching solutions, Siegel said, including 50 working out of the company’s new Tel Aviv-based research and development center.
Currently, ZipRecruiter uses machine learning to inform would-be employees of new job postings via email and text message. And in June it rolled out an AI tool — Candidate Calibration — that surfaces job postings to candidates in its database of 10 million monthly users based on signals from recruiters.
Candidate Calibration drove a 50 percent increase in the number of employers who found a job seeker they liked enough to invite them to apply, Siegel said.
ZipRecruiter’s old business model took more or less a shotgun approach to job matching, Siegel explained in an interview earlier this year. Using those tools, companies could post a job listing to more than 100 social networks, talent communities, boards, and forums every month. But while that worked well for some, others wanted a more personalized, curatorial approach.
“It started to work too well,” Siegel said. “What employers want is a handful of highly qualified candidates. That’s why they use recruiters — that’s the service they provide.”
So ZipRecruiter pivoted, choosing to de-emphasize job descriptions in favor of AI-powered sorting tools. Now, thanks to proprietary algorithms, it can surface applicants with no more than a job title, using skills, years of experience, recency of titles, resume length, location, and application rate. For example, if a recruiter specifies that they’re searching for a product manager in Los Angeles, they’ll get results instantly.
“In a tight and ever-evolving labor market, businesses need effective, innovative hiring solutions now more than ever,” said Eric Liaw, general partner at IVP.
There’s money to be made in online recruitment, Liaw contends — despite cutthroat competition from LinkedIn, CareerBuilder, Monster, and others. Some analysts estimate that it’s a $200 billion market worldwide.
“[ZipRecruiter’s] sophisticated implementation of AI technology has established them as the foremost platform in the space,” he said, “having driven millions of employment matches — they’re truly poised to be the next internet marketplace success story. The growth of the business has been phenomenal, and we are thrilled to deepen our partnership with the company as they continue to improve the lives of both job seekers and employers of all sizes.”
ZipRecruiter has more than 1,000 employees (up from roughly 150 four years ago) in the U.S., U.K., and Israel. More than 1.5 million companies, including Ford, Netflix, Wells Fargo, and Burger King, have used its recruitment software, and ZipRecruiter estimates that it’s accounting for about 10 percent of activity in the U.S. recruitment market.
The company charges a monthly fee for job listings, starting at $250 for three active job slots.