SocialChorus and Lattice, which stress the ideas of culture and communication in workforce management, though by addressing distinct areas of the equation, each closed a notable funding round. The developments indicate continued investor interest in HR tech, despite the challenges of the COVID-19 pandemic and ongoing recession.
Technology investment firm Sumeru Equity Partners led a $100 million investment to fund growth and product development at SocialChorus. The company said the money will allow it to continue the 50% year-on-year growth realized over 2018 and 2019.Big investments in @LatticeHQ, @SocialChorus show investors remain active in #HRTech, pandemic or no. #HR #HRTribe Click To Tweet
Previous financial backers Kohlberg Ventures and Arrowroot Capital will continue as investors in the company, alongside its founders and management.
As part of the investment, SEP will add principals John Brennan, George Kadifa and Mark Haller to the SocialChorus board of directors. The firm said it believes SocialChorus’s tools will be especially valuable to employers because of the rapid shifts now being seen in the workplace.
SocialChorus said its recent growth has been driven by the digital transformation of large enterprises. It noted a McKinsey survey that found 70% of business transformation initiatives don’t reach their goals, leading to the waste of hundreds of billions of dollars. “The leading reason for these failures is a lack of digital capabilities needed to support them,” the company contends. Its products aim to address the issue by improving employee engagement and mobilizing the workforce around key business objectives.
In June, SocialChorus began repositioning itself as a tool for organizational change rather than internal communications alone. The company said workplace dynamics were shifting significantly because of the pandemic, and that it had “reimagined how organizations can more effectively communicate with their distributed workforce.”
Lattice Fundraises at a Rapid Clip
Separately, Lattice raised $45 million in a Series D round led by Tiger Global. Also participating were Frontline Ventures, Founders Fund, Khosla Ventures, Thrive Capital Partners, Fuel Capital, and Y Combinator. The funding will be used to expand the company’s product suite as well as its team.
Lattice said the pandemic has increased demand for people management solutions as businesses adapt to a remote-work culture. “Company culture is forged during difficult times and we’ve seen an increase in companies turning to solutions to sustain and increase the employee experience in our new remote world,” said CEO Jack Altman.
Founded in 2016, Lattice offers performance and engagement products. Besides expansion, the company will use the new funding to develop products and features for the mid-sized and enterprise market, where it’s seeing increased demand.
Lattice closed a Series C round of $25 million last October, just six months after $15 million in Series B round during April.
Investors Remain Afoot
Coming two weeks into the third quarter, the investments in SocialChorus and Lattice hint that VCs remain interested in HR tech, pandemic or no. During 2020’s second quarter, funding in the space increased by more than 14% from the first period, to more than $1 billion.
The analyst and consulting firm HRWins observed that HCM solutions attracted more money from investors than did talent acquisition products during the quarter, continuing trends seen at the beginning of the year.
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