Palo Alto – Jan 16, 2024 – Woodside Capital Partners (WCP) is pleased to share our HR Tech Market Update for the 2nd Half of 2023, authored by Sr. Managing Director Ron Heller and Senior Analyst Alex Casey.
Key takeaways from the report:
- M&A: Activity continued to slow with 26 M&A transactions in Q3 and 25 transactions in Q4, down from 46 in Q2. Active sectors include Employee Engagement and Well-Being, Recruiting, and HCM.
- Notable Transactions:
- Virgin Pulse (acquired by HealthComp for ~$3B)
- Limeade (public company acquired by WebMD for $111.5M)
- Sora (acquired by ADP, had raised $19M)
- Iziwork (acquired by Proman, had raised $81M)
- Notable Transactions:
- Financings: VC activity, which has steadily dropped over the last several quarters, dropped significantly in Q4 to 39 financings vs. 60 in Q3 and 52 in Q2. Companies needing to finance will likely experience continued headwinds in the near term.
- Macro: With inflation having largely stabilized, the Fed’s pause in interest rate hikes should continue and rate decreases are now expected later in 2024. Equity and bond markets rose significantly in Q4, and optimism is growing for solid 2024 growth and improved conditions for public financings and M&A, albeit HR Tech stocks generally underperformed in 2023 vs. broader indexes.
- Strongest HR Tech Categories/Drivers:
- Generative AI (affects many areas of HR Tech)
- Automation (especially in recruiting)
- Data Integration across Disparate Systems (across disparate systems of record)
- Hybrid Support (remote and in-office)
- Upskilling/Learning & Development
- Diversity, Equality and Inclusion (DEI)
- Contractor/Gig Employee Systems
- Internal Talent Marketplaces
- Employee Engagement
You can access the full report here:
Woodside Capital Partners is one of the leading corporate finance advisory firms for tech companies in M&A and financings in the $30M –$500M segment. The firm has worked with some of the best entrepreneurs and investors since 2001, providing ultra-personalized service to select clients. Our team has global vision and reach, and has completed hundreds of successful engagements. We have deep industry knowledge and extensive domain experience in the following sectors: Autonomous Vehicles and ADAS, Computer Vision, Artificial Intelligence, CloudTech, Enterprise Software, Information Security, Digital Entertainment & Lifestyle, Health Tech, Internet of Things, Networking / Infrastructure, Robotics, Semiconductors, Batteries, and Energy Storage. Woodside Capital Partners is a specialist in cross-border transactions, with extensive relationships among venture capitalists, private equity investors, and corporate executives from global 1000 companies. More about Woodside Capital Partners here.
Questions? Contact Ron Heller, Senior Managing Director, Woodside Capital Partners at [email protected].