Why we invested: Phenom
Over the last five years, enterprise businesses across multiple industries and sectors have started to undergo digital transformation. As consumers, we are now accustomed to having services and information available at our fingertips in our everyday life and the same phenomena apply to B2B workflows. Sales and marketing teams leverage real-time data to identify revenue opportunities, product teams have real-time visibility into end-user behavior, and finance teams leverage automation tools to improve financial analysis and forecast accuracy. While HR departments have historically lagged behind other functions, most enterprises have now realized how critically important it is to modernize the HR stack.
In 2020, the global pandemic massively accelerated the need to have a digital talent management strategy. According to Grandview Research, the global HR management market expects to reach $38B by 2027, growing at a 12% CAGR from 2020 to 2027. HR digital transformation is a key part of this spend. Enterprises are extending their corporate brand to attract and retain the best talent, increase employee engagement with measurable correlation to drive top-line growth, and identify and nurture ongoing relationships with best-in-class, external talent in highly competitive markets.
A key component to our Future of Work thesis is rethinking how companies recruit and retain employees. We’ve repeatedly heard from Fortune 500 leaders that the war for top talent has never been fiercer. As we dug deeper into the HR Tech sector, we saw an industry riddled with point solutions attempting to solve niche pieces of a broader puzzle. From top-of-the-funnel talent acquisition through employee engagement, HR leaders are overwhelmed with a volume of tools and products that they must cobble together to try to serve a wide array of requirements. According to the Boston Consulting Group, 84% of organizations changed their recruiting processes to be more digital in the last year alone. Reliance on in-person interaction is no longer an option to win over talent. HR teams have to find new ways to bolster their online presence while leveraging automation to make the most of their scarce recruiting resources.
This is why we are excited to announce our investment in Phenom, an AI-powered Talent Experience Management (TXM) platform that offers an end-to-end solution for talent teams and drives personalization, automation and accuracy for all stakeholders: candidates, recruiters, employees and management. With Phenom, companies can build career websites with hyper-personalized job and content recommendations, utilize chatbots to communicate and recruit potential hires, and leverage real-time data from CRM and CMS systems to drive engagement with top potential talent. The platform empowers current employees to identify new opportunities and career paths within their organization based on their experience, skills, and interests and identifies areas for improvement that will help make their progression successful. Phenom also ensures employees are supported along the way by their peers via its diversity and inclusion offer that builds internal communities and cultivates critical conversations. Phenom’s broad product suite caters to the needs of each stakeholder in the talent lifecycle: candidates, recruiters, employees, managers, and executives. In doing so, the TXM platform sets up each role with the right tools for success while ensuring all aspects of the talent journey are working in tandem. HR leaders no longer need to manage disparate systems that struggle to share data between them, as Phenom’s platform creates a seamless flow of information not only between its product lines but other integral tools in human capital management as well.
Phenom’s rapidly growing customer base spans over 400 global enterprises that aim to hire and engage a wide array of employees, including part-time, virtual, and knowledge workers. We’ve been highly impressed with the resounding enthusiasm and excitement we’ve seen among Phenom customers. Industry-leading companies like Southwest Airlines, Newell Brands, Land O’Lakes, AXA, and Radian Group Inc. rely on Phenom to address their talent acquisition and management needs. Land O’Lakes recently experienced a surge in demand for its core consumer products during the pandemic. The company needed to quickly build a robust talent pipeline to support its supply chain’s growing needs. Land O’Lakes launched its first end-to-end digital talent marketing campaign on Phenom’s platform, “Feed the Nation,” with astounding results: 75% of open positions were filled from the campaign alone.
The power of the platform can be mainly attributed to the best-in-class, AI-based technology stack and to the people behind it. The company’s bold purpose to help a billion people find the right job is an ethos the entire leadership team takes seriously. Founders Mahe Bayireddi, Hari Bayireddy and Brad Goldoor lead with compassion and curiosity and look for similar qualities in the executives they have brought on to scale the company, most of whom have been with Phenom for the better part of the last decade.
At B Capital, we partner with founders who are transforming the way we work and live with innovative technology. Our partnership with BCG gives us the opportunity to help Phenom continue to scale across different regions in the world. We are excited to partner with Phenom and look forward to working together to enable enterprises to bridge the gap between people, processes, and systems to fuel exponential growth.