The Talent Matching Platform connecting UK SMEs with recent graduates and now expanding into new markets.
- Investment sought:
- Equity offered:
TalentPool is a talent matching platform, connecting UK SMEs with recent university graduates. We're on a mission to change the way that companies find talent. We operate a little bit like a recruitment agency, but without any actual recruiters. We've created a platform that identifies suitable individuals for a role and connects them with an employer, automating what was previously a largely manual process.
The result is a revenue-generating model, which has already broken even. As the process takes place on a platform, we can charge less than half the standard fees of a traditional recruitment agency, fundamentally disrupting the space in which we operate.
Job-seeking candidates sign up to TalentPool through our simple and intuitive interface. To date, we've had more than 50,000 join us. At the same time, employers with vacancies to fill sign up and launch campaigns through the platform and are supported by a dedicated Campaign Manager from launch to hire. We've worked with more than 500 companies to date, sign up new clients and launch campaigns almost every day (more than 50 clients so far in 2018).
Over the past 30 years, the recruitment sector has undergone a number of significant changes, in particular the shift from print-based to online listings and the introduction profile databases – most notably LinkedIn. Whilst these have certainly changed the landscape, we don't believe they have disrupted the status quo. We feel that online platforms have simply become tools for traditional recruiters. We consider TalentPool to be a leader in a new breed of solutions and the first truly disruptive force to arrive in the industry for decades.
Our mission is to disrupt the recruitment market at large. We see that the status quo does not work for employers or candidates. What we've seen is that employers have to deal with high fees, pushy recruiters, and irrelevant applications. Meanwhile, we've seen that candidates can have very limited visibility of the opportunities out there and can end up making endless applications for roles that they may not even be qualified for.
Substantial accomplishments to date
• Launched MVP platform in Q3 2014, which incorporated process automation.
• Built & launched versions further of the platform in 2015 and 2016.
• Raised just under £300k funding round in Q1 2016 to develop platform & proposition.
• Shortlisted for Recruitment Technology Innovation of the Year, Recruiter Awards 2016.
• Company and service profiled by The Guardian, June 2016.
• Raised investment from existing shareholders in January 2017 to target profitability in Q4 2017.
• Named by Silicon Republic as one of London’s top 30 startups in March 2017.
• Worked towards full automation of the recruitment process in Q2 2017.
• Platform hit 32% success rate in July 2017 – We understand this is equal to the very best traditional agencies.
• Reached breakeven ahead of schedule in H2 2017.
• Broke through £0.48m revenue run rate in February 2018.
• Attracted more than 500 clients to date with a return rate of nearly 60%.
• Working with 20+ universities and careers departments.
• 50,000+ candidate signups since launch, with what we are confident is a strong and growing brand amongst recent graduates.
• Proven that we can scale revenue while keeping fixed costs relatively consistent (unlike a traditional agency which typically has to scale costs with growing revenue).
We monetised for the first time in 2014, a few months after the launch of our MVP. Over the following 24 months, we experimented with a range of monetisation strategies, from charging clients up-front fees, to a price per application or interview.
Ultimately, we felt that the right approach was to take an existing and widely-understood pricing mechanism but to dramatically reduce the size of the fee. We did this so the competitiveness of our model would be clear to our clients so we could be easily compared with other service providers.
As such, we have adopted a fee-on-hire model, but instead of charging between 15% and 25% (which is standard fee in our sectors), we charge 8.5% of first year base salary per hire. With an average salary of over £21,000 p.a. on the platform, this comes to an average successful hire fee of c.£1,500 + VAT.
Use of proceeds
The core activities are planned to be covered by revenue. All investment is therefore forecast to be spent across two key areas: Technology and Sales & Marketing.
For technology, there are three areas we plan on investing in. The first is platform robustness and scalability, ensuring that our tech stack is able to handle the increased volumes we are targeting. Secondly, we will be continuing to increase the amount of data that we generate and capture throughout the process for both candidates and employers. This is in part to facilitate our growth in to new markets but also provide the matching engine with expanded data sets. Thirdly, and most importantly, we will be improving the matching engine itself by taking the data we capture and applying Machine Learning and AI models and techniques to better predict which roles are right for our candidates, and which candidates are right for our employers. We feel that we are well positioned to take advantage of recent developments in these areas, due to our dataset size and our business model focussing on the matching stage of the hiring process.
Sales & Marketing
We believe in sales being enabled by marketing. This means growing awareness of the TalentPool brand. Over the past three years, we have tested a vast range of marketing channels; we now know what works best for our business, which channels are most scalable and the CPA for each. Specifically we will be focussing on the following areas:
Although we are building a Talent Matching Platform which aims to connect people and companies in almost any market or geography, we currently operate in the recent graduates market for UK start-ups and SME's. We began our journey here for a number of reasons, not least because when we first started the business we were relatively recent graduates ourselves and therefore understood the market. At the same time, we felt barriers to entry were comparably low (which meant we could get going at a basic level and learn from there) and margins are fairly modest; if we can get our business model to work here, it should certainly work for more senior roles.
By our own calculations, the graduate space is worth in the region of £50m p.a. We see that our typical clients have between 5 and 500 employees, with 75% based in London and the remainder largely in Manchester & Birmingham. Sector-wise, we believe that we have our strongest presence amongst startups and growth stage businesses, agencies (digital, creative, marketing & PR) and boutique finance and professional services firms (small investment managers, M&A houses, consultancies, accounting & legal firms). In terms of our candidates, most have between 0 and 2 years of experience and graduated from a top 50 UK university.
Over the next 12 months, and fuelled by the investment we are raising, we will be making our first move into an adjacent market. We plan to offer our service to companies wishing to recruit individuals with between 2 and 5 years of experience (we call this the ‘Grad+’ market) and it is a natural extension of our current position. Indeed, we believe our clients will be largely the same companies. We know there is a market opportunity for us here because our clients have asked us to offer this service and because ‘Grad+’ hires have already been made through our platform, despite our current focus on the graduate market. Additionally, in the region of over 17,000 of our existing members (candidates) qualify as ‘Grad+’, having gained experience since first joining TalentPool in 2015/16, meaning the expansion is an obvious evolution for both sides of the business.
Characteristics of target market
The key factor at play in our market is the percentage of businesses which currently use traditional recruitment agencies. We feel that our proposition is most compelling for these businesses as we give them access to a wide pool of candidates, and a price tag less than half of what they might be used to, whilst maintaining access to a campaign manager who isn't 'selling' candidates into a role.
In the graduate space (where we operate now), traditional agencies are certainly used, however much less frequently than in the Grad+ space. Based on our analysis, we believe that SMEs in our target segments use recruitment agencies for around 10% of graduate hires, but our research (a survey of clients and contacts) indicates that this climbs to around 35% for Grad+ hires (those with over 1 year of experience).
Nevertheless, we think that a good share of our clients have not used us as alternative to a recruitment agency, but have used TalentPool as an alternative to either job boards, direct searching, or ‘word of mouth’. In these instances, we believe TalentPool is more repeatable and reliable than the alternatives and, crucially, we control application volumes and relevancy, meaning that internal filtering requirements are minimised.
We feel that TalentPool is a compelling proposition regardless of whether a company has an internal recruitment or HR team - We've successfully worked with companies with head counts ranging from 6 to over 1,000 employees. The individual we work with in a business can be anyone from the CEO to a manager in the HR or recruitment teams. Fundamentally, we’re all about sourcing the right candidates and whether that feeds into an established system or an individual’s inbox, it still delivers results.
We target two distinct groups of potential users: Candidates and Employers.
For candidates, there are two principal elements to our marketing strategy. The first is our relationship with universities and university careers departments. We already have a strong presence here, with more than 20 relationships established and many universities recommending TalentPool as a great route to finding a job at a startup or SME to their students and graduates. The second is our digital marketing and social media presence; we have invested considerably here over the past two years and consistently achieve what we feel is a good cost per acquisition (CPA).
For employers:, we aim to use a combination of traditional B2B engagement strategies, as well as some approaches that we believe are unique to TalentPool. Overall 'marketing enabled sales' is our approach, with case studies and strong content being used to generate brand awareness (e.g. our fortnightly Talent Trends newsletter to 3,500+ readers), which we think has generated inbound leads, referrals and soft enquiries. Our sales team will be building on our existing networks and relationships with 2,000+ SMEs.
We do have some direct competition, although we feel that none of our peers have yet achieved significant scale. We believe that our more significant competition comes from the incumbent and established recruitment agencies who serve our target market. Here, we are positively differentiated in two key ways. Firstly, due to our automation, we are able to offer our services at a price point which traditional agencies are typically unable to match. Secondly, because we facilitate connections through our platform, unlike traditional recruiters we do not 'sell' candidates to employers or indeed employers to candidates; we believe the result is happier customers and stronger retention.