Gem’s Next Chapter: $37M in Series B Funding
When Nick and I started Gem three years ago, it was in the midst of a paradigm shift in recruiting: companies were going out and looking for top talent rather than waiting for talent to come to them. We witnessed how powerful that proactive approach was for our respective teams at Dropbox and Facebook—both cutting-edge companies who were adopting this strategy ahead of the curve. As engineering managers at two rapidly-expanding companies, we’d both become hiring managers involved in recruiting hundreds of candidates. We personally witnessed how powerful that proactive approach was for our eng teams.
But we also saw that along with that new strategy came a new need: recruiters didn’t have a single source of truth to track and manage all the work that happens before candidates apply, which has quickly become the most important part of the hiring funnel. Up to 80% of recruiting now happens prior to a candidate applying for a role. This meant that recruiters weren’t keeping tabs on, or getting visibility into, the vast majority of their work. And it’s why we started Gem.
Building a Customer-Focused Approach into Our DNA
Sourcing gained such prominence in recruiting because while 90% of global professionals are open to hearing about new opportunities, only 30% of the workforce is made up of active applicants. Attracting talent has been the #1 concern of CEOs and other C-suite execs for some time; and year-over-year, the majority of recruiters report a lack of qualified candidates entering the hiring process. Talent acquisition’s best option was to start reaching out to passive talent; and this turned out to be a remarkably successful approach. Last year, according to HBR, “the majority of people who took a new job last year weren’t searching for one: somebody came and got them.”
With the advent of sourcing there was a new “top of the funnel” in recruiting; but there wasn’t a solution for it yet. Nick and I knew that sourcers and recruiters deserved more than the piecemeal tools they had; so we built a platform that allows them to craft, send, and follow up on outreach to build strong relationships with passive talent. It gives them data on that outreach—from open rates, to interested rates, to content stats—so they can derive best practices for their messaging, and increase their conversions to phone screen. And it provides teams, hiring managers, and talent leaders with pipeline stats so they can measure things like time-to-hire for a specific role in a specific geography, or know how many candidates they’ll need at every stage of the funnel in order to hire for each of their open roles.
Ultimately, we wanted to create a solution that allowed recruiters to focus on what really matters—building and maintaining relationships with talent. And it turns out we weren’t wrong: that single source of truth is in very high demand among recruiters. Gem has acquired over 300 customers so far—including Slack, DoorDash, Coinbase, Peloton, and Pure Storage. From day one, we’ve been led by our value of customer-centricity. Our engineers and product managers have direct lines of communication with our customers, and often sit in on sales calls or customer success conversations.
These aren’t standard procedures, I know; but we’re not going to make a game-changing product if we’re not collaborating with, and thinking alongside, the folks who have their hands in our product every day. It’s proven to be the right approach. Not only have we built exceptionally strong relationships with our customers, but teams who use Gem have seen their response rates double—and sometimes triple. In some cases they’ve seen a 12x boost in recruiter productivity, a 40% decrease in time-to-hire, and 135 hours/week saved in repetitive processes teamwide. We hear from recruiters all the time, who share stories about how they’ve suddenly got 3 qualified devops candidates interviewing in the same week—which, if you’re a recruiter who hires for devops roles, you know just doesn’t happen. That’s the power of asking the probing questions, and listening closely to how our customers respond.
On Growth and Funding
Collectively, our customers reach out to 200,000 candidates on our platform every month. Their results have been so powerful that they invest 20% more into Gem year-over-year. And we’re seeing incredible organic growth, both through strong word-of-mouth and recruiters introducing Gem to their team as they change jobs.These are some of the reasons Gem saw a 4x revenue growth in 2019, and why Q1 2020 (February - April) was our best quarter yet, despite 2 months of shelter-in-place and the larger economic landscape. And today, we’re officially announcing our Series B funding round. The $37 million round was led by David Wadhwani at Greylock Partners with participation from our existing investor, Accel. This brings our total capital raised to $48 million since we launched our Talent CRM platform in 2017.
What’s Next for Gem
There’s a lot I’m feeling both proud of and hopeful for right now. I’m proud of our remarkable team, and of our decision to build a customer-centric approach into our company’s DNA. I’m glad to be able to say that we’ve been building diversity features into our product all along, and that we’re helping hiring teams check their biases and move female-identifying and underrepresented talent through their funnels—because that’s more important than ever right now. I’m proud of our customers, who are modernizing this industry with their brilliant approaches to recruiting, and who are constantly teaching us how to build a better product.In so many ways, we’re just at the beginning. Last year we launched our talent CRM, which was a natural extension of our sourcing product. Some of our favorite features we rolled out last year include:
- Rules of Engagement, which give teams full visibility into candidate ownership.
- Send-on-Behalf-of (SOBO), which lets recruiters send emails “from” hiring managers or execs to increase response rates.
- Pipeline Analytics, which shows passthrough rates and fall-out rates for every stage of the funnel. Recruiters can gauge the health of their pipelines, grouping by department, job, location, source, gender, and more.
- A forecast calculator, which uses historical hiring data to show recruiters and talent leaders how many candidates they need in each stage of the funnel in order to hit their hiring goals.
- A careers site form which lets interested talent sign up to hear about new job opportunities.
- Custom stages, which allows staffing agencies to manage their clients’ candidates through the hiring pipeline.
- Integrations with Calendly, Grammarly, and Splash.
- Faster site and search speed, improved email finding, more ways of grouping and filtering candidates (by source, sourcer, hiring manager, last activity, etc.) and more ways to save and share reports.
We’ll be using this funding round to double-down on product innovation—particularly our diversity features—and build out the most powerful platform available for modern recruiting. We want to keep giving recruiters, talent leaders, and talent ops more of what they want—and faster. And we never want to lose focus on that as our priority. In 2020, we’ll be focusing on building out more ATS integrations and making improvements to email quality. We’ll expand our pipeline reporting, adding time-to-fill, goal-tracking, forecasting, diversity reporting, and ROI reporting. We’ll add more integrations to automatically track more touchpoints. And we’ll build out features that help recruiters and sourcers collaborate with hiring managers, because we believe that recruiting is best when everyone is on the recruiting team.
Thank you to all the recruiting teams out there who are using Gem to hire better. Keep the feedback coming, and know we’re listening closely. Thank you to Greylock Partners and Accel for your faith in our vision. And thanks to “Gem’s Gems”—the team behind the scenes, making all of this happen. I’m so excited to keep working with you. And if you’d like to hear more about this funding round, the announcement is here.