ZipRecruiter Is Valued at $1.5 Billion in a Bet on AI Hiring
(Bloomberg) -- In the future, the tedious process of sorting through job applications will be done mostly by a computer. In fact, according to ZipRecruiter Inc. Chief Executive Officer Ian Siegel, much of it already is.
On Thursday ZipRecruiter announced that it had raised $156 million from investors in a funding round that valued the company at $1.5 billion, making the online hiring marketplace and jobs board the newest tech unicorn. The round was co-led by Wellington Management Co., investing in the company for the first time, and IVP, which had participated in an earlier round.
Siegel said that ZipRecruiter will spend a significant portion of the new funding on honing its machine-learning processes, which it already uses to sort and refine the applications it presents to hirers. Siegel said he believes the technology will usher in a "new age" of recruiting using artificial intelligence to match applicants with hiring managers.
Since launching in 2010, ZipRecruiter has become a large player in the Los Angeles tech scene. The company has close to 1,000 employees in three countries. But competition in the online hiring space is fierce, with contenders including Monster.com, Glassdoor Inc. and CareerBuilder LLC. Beyond the usual players, Alphabet Inc.’s Google also launched its own job search tool last year.
Siegel said that ZipRecruiter’s business model has evolved as the company has grown. In its early days, ZipRecruiter would connect customers with as many job sites as possible, but that practice quickly grew unwieldy as employers were flooded with hundreds of applications. More than 100,000 businesses now use the platform, the company said, with 10,000 new businesses joining each month.
To solve the problem, ZipRecruiter turned to AI to help it cherry-pick the most qualified applicants from its pool of 10 million online job hunters, in fields ranging from truck drivers to data scientists. The company’s technology learns what employers are looking for and then scans its users to provide a curated list of candidates -- a process similar to the way Netflix Inc. and Amazon.com Inc. channel their customers’ preferences to create tailored recommendations for videos users might want to watch.
The technology has become so efficient that ZipRecruiter said 80 percent of employers who post a job online get a qualified candidate through the site within the first day -- a time frame Siegel said he hopes to shorten.
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