Human Resources tech start-up RiseSmart announced on Feb. 13 that it received an $11 million investment to expand sales and marketing. The San Jose-based company, which was launched in 2007, focuses on returning laid-off employees to the workforce. The timing of the company’s launch was impeccable, as the recession hit shortly afterward. RiseSmart filled an essential need in the workforce community and immediately “began amassing venture capital investment that totaled $12.6 million by 2012,” according to Lauren Hepler in the Silicon Valley Business Journal.
RiseSmart President and CEO Sanjay Sathe has worked in marketing and sales for over twenty years with companies like Sabre Holdings, the parent company of Travelocity, Lufthansa and HSBC. Sathe also has experience with Brierley & Partners, a CRM and loyalty management company that worked with brands like Hilton Honors, Hertz #1 Club Gold, Sony and Nokia, according to the Brierley & Partners’ website.
The $11 million investment came from Accel-KKR, a private equity firm, and Norwest Venture Partners, a former investor in the company. Sathe stated that the funds will be used “to rapidly expand our sales and marketing organizations so we can continue to increase our share of the market.”
RiseSmart offers outplacement services on three different levels. The Employee Transition service assists employees in locating new jobs quickly. The Employer Transition enables companies, from small businesses to Fortune 1000 companies, to reduce costs and protect their brands when outplacements occur. Finally, the new Compass service, which is still in beta, allows employees to take charge of their career while helping companies plan for the future. Hepler reports that RiseSmart earns “money by contracting with employers to match their laid-off employees with new work.”
Sathe told Hepler that corporate outplacement is “not a feast or famine business.” With changes like layoffs, mergers, acquisitions and workforce attrition, outplacement is a $3 billion-per-year business. Sathe feels that this latest investment in RiseSmart “is further validation” that the company is moving in the right direction. “I firmly believe that with this investment, we are poised to do nothing less than lead a revolution in outplacement and career management,” he added.
What makes RiseSmart different — besides its growing number of clients — is its technology. RiseSmart uses a human-powered semantic job search, which the company’s website jokes is quite a mouthful “because it’s just THAT awesome.” The job search starts by searching the web for relevant jobs and then narrows down opportunities with the unique semantic matching technology. Before an individual receives notification of a job match, a person reviews the position to ensure that it is an ideal match for the candidate. Sathe believes that it is this technological aspect that makes RiseSmart so successful, and he feels that the funding will help the company “take full advantage of market shifts” that are pointing to “result-driven model[s].”
In the company’s blog, Sathe explains why Accel-KKR chose to invest in RiseSmart. Greg Williams, managing director of Accel-KKR, stated that the company’s “superior management team, client base, service-delivery model and technology platform [were] key factors” in the selection process. After observing the company for some time, Williams said that “RiseSmart has a unique service model that differentiates the company in the marketplace, and as a result, it has demonstrated a consistent ability to earn the business of Fortune 500 clients, as well as that of companies of all sizes. With the help of Accel-KKR’s investment, we fully expect RiseSmart’s momentum in gaining market share to grow dramatically.”
Sathe is confident that the $11 million investment will be the catalyst to further improve RiseSmart’s service and system. He says, “Never underestimate the power of having a job,” adding that his job is to ensure that RiseSmart will change the way outplacement services work.