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RecruitLab

General overview

RecrutiLab - Recruitment marketing ATS with visual pipelines and video recruitment tools

  • easy collaboration with hiring managers
  • software adapts to your recruitment process per role
  • accelerate the hiring process with asynchronous video interviews
  • easy to use + control
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Addressable Global Market:

There are about 10m (and growing) recruiters worldwide, RecruitLab is aiming to address - 100k recruiters in 7 years of operations. Below you can see some actual numbers of the market size RecruitLab is tapping into:

  1. HR Software Market size was valued at $ 15.59 billion to $24.04 billion in 2021 and is projected to surpass $33 Billion by 2028, growing at a CAGR of 10.10% from 2021 to 2028.
  2. Applicant Tracking System (ATS) Market is estimated to be $2.3 billion in 2021  and reach $3.2 billion by 2026 worldwide.[1] 90% of Fortune 500 Companies are using ATS software to bring the talent to their companies.[2] The demand for the recruitment solutions is growing quickly among small to midsize companies as well where currently only 40-50% of the companies have ATS solutions.

Problem

  • “Old school” way of reaching the candidate is perfectly explained in the “Post and Pray” term. Hence, recruiters are listing jobs on resources and are waiting to hear back from the candidate. Flow is time-consuming and inefficient.
  • Traditional job boards don’t return suitable candidates. That’s why the number of applicant sources is increasing. And together with the latter the need for a single place where to collect and manage all candidates from different sources, because:
    • Around 90% of applicants are unqualified for the position they apply.
    • Applicants are waiting for the feedback. The missing feedback is the biggest threat for the employer brand. Recruiter ghosting is made public quickly and it’s damaging also for the recruiter’s personal brand.
    • Job advertising on social media is difficult for recruiters because they need decent landing pages for that and there’s a need to buy ads from social media. Ad management tools in FB and Linkedin are time-consuming to learn and deploy.
    • Fragmented and complicated recruitment tools make HR work difficult and inefficient for employers that are regularly hiring.
  • Large enterprise segment (>1000 employees) dominated the market with 63.8% of the market in 2019. The enterprise ATS solutions such as those by Oracle and SAP are very expensive, and the cost of this software is generally prohibitive for companies with less than 500 employees. Among large organizations, the top perceived barriers to adoption (cited by 60%) is that “leadership will not commit to an investment in ATS.”
  • Similarly, for SME’s the top reason (46%) for not adopting an ATS platform is „cost.“ However, due to the popularity of cloud-based solutions from new entrants on the market with their cost efficiency and accessibility, adoption of recruiting software by small and medium-sized enterprises is starting to increase dramatically.
  • According to the statistics, only 15% of available candidates on the market are actively searching for a new opportunity. The remaining 85% are passive, waiting to be approached.
  • In addition, recruiters have to manage different channels separately; hence workload is always only growing. There is a lack of automation within the field, and recruiters live under stress.
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Solution

RecruitLab is a platform to manage the full recruitment cycle with built-in recruitment marketing tools, recruitment automations, interview scheduler, and video recruitment tools, to cut recruiters work by 70% while increasing top talent acquisition.

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RecruitLab is all in one, no code marketing and recruitment tool. Product has a lot of similarities with Pipedrive but is designed for recruitment, offering 3-layered view to go deeper and deeper within the pipeline. There are:

  • General view as the overview layer of your projects/positions you look for
  • Pipeline view, where user can go deeper and check what is the current status per position they are looking for.
  • Candidate view, where user can dive deeper into details of the candidate, one could check all the asynchronous interviews, tasks, etc.

On top to the previous section:

  • Candidates’ talent pool, with direct marketing tools and GDPR automation.
  • Recruitment LP tool (visual editor, no designer or developer skills needed)
  • Career page builder (visual editor, no designer or developer skills needed)
  • Customisable application forms’ tool
  • Interview scheduler
  • Automated recruitment funnels (recruiters are able to customize by themselves)
  • Asynchronous video interviews, live video interviews
  • Collaboration tools for recruiters and hiring managers
  • Job board integrations
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Target audience:

Below I am listing different groups, which all fall into the target audience group:

  1. Recruiters, hiring for a high volume roles like sales-, service, assisting, marketing, junior roles, where there is usually need to create an inbound flow of candidates through job posting, recruitment marketing and there are usually many applicants per role. (Examples of perfect customers; KPMG, DPD, Tallink, Rademar, Circle K, Upsteam, Lindstrom, etc)
  2. Recruiters, hiring for many different roles. (Examples: Tallink, small recruitment agencies (2-10 employees) or freelance recruiters with more than 20 placements a year)

Marketing

Marketing is being divided into three segments:

  1. Profile webinars, through which then gather target audience and, and convert from there. (40% of the MRR)
  2. Inbound leads (35% of the MRR) through:
    1. Paid ads
    2. Organic inbound + others
  3. Referrals + Email sequence (25% of the MRR)
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CAC: 2000€ (YTD April ‘22)

LTV: € 12400 (YTD April 22)

CAC payback period: <1 year

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It is also worthy to mention that the conversion from webinar guests to users is impressive, you can check this below. (conversion from webinar quests to sales qualification call varies a lot depending on the webinar topic. But those who we call convert extremely well to demos and from demos to customers)
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Unit economy + Business

Price: Product is being sold at 59€ per monthly user, price is rather matching the competition. Of course, there are some exemptions:

For bigger teams RecruitLab is creating a custom offers, for example, biggest clients are paying 700€ monthly. (UK based client)

Sales Cycle: Being calculated from the first contact - first invoice sent out. It is different per customer segment :

  1. Recruitment agencies - 45 days (median)
  2. Employers - 60 days (median)

MRR - 15k €

Burn rate - 12k €

Runway - until November 2022

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Please note, since we are facing potential economic downturn, FFF believes it is important to address: The burn rate multiplier index is at on average x1.04 (was x0,88 Feb - Apr) currently but will go higher after raising this round. Founder has calculated, it will go up until x3 as there will be a lot of costs, to hire people, scale RnD, etc. Still, according to the forecast, it will go below 1 in 16 month after closing the round and is budgeted to be x0,5 by the closing of Series A round. The roadmap is built to go cash-positive with no lay offs in case next funding round will get delayed.
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*Please note, PnL + Projection table may be obtain upon the request

Product 

Currently:

The product also allows various features, which help the recruiter use it as an all-in-one solution; there is no need to use external software. All can be done without leaving RecrutiLab. In addition, recruiters may automate the process within the pipeline, so a lot of time can be saved. Finally, recruiters can set “if-this-then-that” rules and let the product assist them. From the features, I would highlight:

  • Recruitment Marketing
  • Video interview module (live and asynchronous)
  • Collaboration tools (for within recruitment team and for collaboration with hiring managers or clients (agencies))
  • Landing page creator (ahead of the competition as it is simple and efficient LP can be created with no code, easily)
  • Interview scheduler
  • Recruitment intelligence (In the making, RecruitLab gathers a lot of data, which will be turned into actionable insights for recruiters (recruiters’ performance tools)
  • AI element - it does not sort for the recruiters, but it tracks the pattern of the recruiters and helps to prioritise according to the relevance, based on the behavioural patterns in previous searches of the same recruiter within a similar position
  • Integrations with applicant sources and HR software
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In Development + Future:

  • All the product has been built so far by 1 full time developer and some outsourced bites of UX. Product doesn’t have any major technical debt, but has a lot of corners to polish from UX point of view to increase NPS, NRR and to optimize time spent on customer support.
  • Recruiter performance tools (actionable insights)
  • Keep building integrations with external applicants’s sources and HRIS-s
  • Pre-selection AI
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H1 / H2 / H3 /H4 are Quarters after the fundraise is done.

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Please note, RecruitlLab is planning new features based on research and customer needs in case of having 2 paths, it is important to highlight that they would always prioritise the need of an existing customer over potential customer who is looking to join IF some feature will be added.

Operations from here on

There are 2 main parts, which will be addressed as a priority after this round is closed:

  1. Recruitment:
    1. Add people to the marketing team (3)
    2. Add people to the sales team (3, step by step according to the trends in growth and inbound leads)
    3. Add a customer success manager (1 can handle up to 100 clients)
    4. Expand the development team (2 full time + UX-dev outsourced half time)
  2. New Markets:
    1. Priority is the UK
    2. Lithuania (partly validated as well), and other small, non English speaking countries to follow

Validations

Launched in: 12.03.2020, Recruitment Software OÜ

Key Metrics:

  1. MRR
  2. Nr of demos + conversion (helps to understand if product is still needed and is on the right track)

MRR: ca.15k€

Number of customers: 77 companies / 500 + users

Paying customers: 77 companies / 500 + users

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Please note, one of the biggest validation points is the Network effect. Agency brings its clients into system as well as they love the functionality, and usability of the RecruitLab.

Investments so far

Stage: Pre-Seed

Amount: 300k

Investors so far:

  1. Superangel
  2. Peep Vain
  3. Timo Peep
  4. Urmas Purde

Total amount raised until today: 300k €

*Cap Table:

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*More detailed Cap table can be seen upon the request

Team

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Short Background:

  • Paavo and Marie met at CV Keskus, further opened up their own recruitment agency. They have great synergy and Marie have covered for Paavo seamlessly at times, when Paavo had to put focus elsewhere. Great, reliable professional relationship.
  • Paavo met Karl-Sander, while launching Kinnisvara24 portal, where Paavo was head of project and Karl-Sander serving as a Tech Lead. Throughout the years, they managed to avoid any kind of conflicts, holding solid professional relationship.
  • All founders are dedicated full time, average gross salary 3330€ BRUTO, this will be raised by 33% after the seed round.

Competitors

Country: SE Raised: 16m USD to date Product: Teamtailor is developing an employer branding platform. They help SMEs market themselves as an attractive workplace, engage their employees and improve their recruiting process. All in one easy-to-use web service. Customers: Undisclosed Growth: Undisclosed

Country: US Raised: 84.2 USD to date Product: Workable is the world’s leading hiring platform. We provide in-house recruiters and hiring teams with more ways to find more qualified candidates, and help them work together to identify and hire the best. Companies who use our software get from requisition to offer letter faster, with automated and AI-powered tools that source and suggest candidates, simplify decision making and streamline the hiring process. Customers: Undisclosed Growth: Undisclosed

Country: NL Raised: Undisclosed Product: Recruitee is the collaborative hiring software that delivers the complete solution to help internal HR teams work with the rest of their organization to hire better together. Customers: Undisclosed Growth: Undisclosed

Country: US Raised: Undisclosed Product: Recruit CRM helps recruiters manage all their work on one simple platform. We take care of all the repetitive work and help recruiters do what they do best: Fill positions. When you need to schedule interviews, set reminders, get an updated resume or collect feedback from interviewers, Recruit CRM has you covered. Customers: Undisclosed Growth: Undisclosed

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Please note, RecruitLab's advantage is with the simplicity, and stickiness of the product. Even person with limited skills, knowledge and expertise can efficiently create and manage recruitment pipelines, create LPs, and cut down on time when it comes to recruitment.
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Round information

General Ask: 2m € new cash-in via Equity

Commitments so far, amount: 1,5m € (Change Ventures (Yrjö Ojasaar leading this round)

Investment instrument: Equity

Pre-money valuation: 8m €

Round closing deadline: 30.06.22

Ask for Fund Fellow Founders: 250K€ for Fund Fellow Founders SPV

SPV Lead: Akim Arhipov / 10 000€

Min ticket to participate: 10 000€

General Cap Table: Available upon the request

Funds allocation:

  • Recruitment 
  • New Markets
  • Scaling

Pitch Deck:

RecruitLab_Pitch_Deck_22-04_final.pdf2163.1KB

Upon Request available: Detailed Cap Table / Costs and Revenue + forecast / Product Development Roadmap

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Finally, Reference

  • Below you can find some feedback from client interviews, done by Yrjö Ojasaar (Change VC), who are also joining, and leading this round:
RL interviews.docx.pdf80.1KB
  • Also, you can check the Webinar conducted by their existing clients wit a purpose to sell RecruiltLab to subsequently their own clients. CHECK IT OUT HERE
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Also, Client contacts (KPMG Eesti, Rademar, Euronics) to validate are available upon the request