The decrease in funding could be due to the shift in focus towards artificial intelligence (AI) in business and work tools, rather than HR. However, there are AI applications in the HR sector, such as recruiting pipelines and interpreting new policies and laws. Other areas, such as employee benefits and childcare platforms, have seen some interest. Despite this, funding and dealmaking remain slow, with a disconnect in price between buying and selling.
Key takeaways:
- Venture funding in the human resources tech sector has slowed down in the past year, with startups in the space raising less than $3.3 billion in the last four quarters.
- Large growth rounds in the HR tech space have virtually disappeared, with only two rounds of more than $100 million raised.
- Artificial intelligence (AI) could play a significant role in the HR sector, with potential applications in recruiting pipelines and interpreting new policies and laws.
- Despite the slowdown in funding, there are bright spots in adjacent areas such as employee benefits and childcare platforms.