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Q2 Work Tech Investments

Want some good news? The Starr Conspiracy has broken down the Work Tech investment numbers for the first half of 2020, and 2020 is on an almost identical pace to last year’s investments.

For the period April 1–June 30, we tracked 99 Work Tech deals worth $1.7 billion, compared to $2.2 billion in Q2 2019. However, when you compare H1 2020 to H1 2019, investment is almost even, with $3.78 billion this year, compared with $3.92 billion last year (I mean, what’s $140 million, right?). When you drill down into Q2 numbers, you’ll see some interesting stuff:

HCM, $514.8 million: Most of this investment is going into Low-/No-Code Enterprise Software, Workforce Management (especially for the distributed workforce), and automating HR case management. Again, think about enabling enterprise agility and the distributed workforce. The majority of this is early stage (Seed/Series A), but with more than a few $10 million–plus rounds.

Employee Experience, $254.6 million: Most of this total is going into conversational AI, talent mobility, and workplace systems that provide data analytics (think social distancing). Most of this number is gearing toward remote work. Most of this is growth equity, not early stage.
Learning, $238.5 million: Not to sound crass, but this category is going to be a big winner coming out of this crisis because of the need to train and enable distributed teams.

Communication, $202 million: Obviously, enterprises everywhere are seeing the value in better communication and collaboration software. Most of this investment was growth equity, not early stage investment.

Talent Acquisition, $182.6 million: Typically, TA is about a third of investment in any quarter. It’s around 10% the past two quarters with a lot of international. There is overdue consolidation coming after years of over-investment.

Well-being, $153.1 million: Mental health and financial wellness are the story. Most of this is early stage.

Compliance, $53.1 million: Most of this investment is in areas such as office safety and hygiene and sexual harassment reporting.
D&I, $38.5 million: Lots of solution categories have D&I features. Now, more startups positioning around D&I are getting funded.

Talent, $16.7 million: Very little spending. These solutions are valuable, but they need to establish their essential status in a tough market. Some will. Some won’t. This will be a key theme in The Starr Conspiracy’s upcoming brandscape Talent and Learning brandscape.

We can talk about this stuff all day. If you’d like to chat about this, give us a shout. Bottom line is to stay positive. This is great news for the Work Tech industry.

This except originally appeared in Work Tech Weekly, a newsletter by The Starr Conspiracy.

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