Engage Technology Partners (“Engage”), is a UK based technology platform revolutionising the way the recruitment market operates. Like all successful technology stories, Engage identified an obvious problem in its target market and set about creating a solution. In a similar way to the transformative, collaborative cloud platforms such as Uber and Airbnb, Engage is looking to improve the recruitment hiring process as its disruptive technology solution gains
The City has shown support for the burgeoning young tech star, with the Company successfully raising £2 million so far in 2018 at a valuation of £30 million, having already raised £5.5 million in 2017 at a valuation of £15 million.
Engage was founded in 2013 by an ambitious management team with first-hand experience of the recruitment, payroll and accountancy industries. Having seen the issues from both a customer and supplier perspective, the team was well placed to develop a product that delivers significant efficiencies and cost savings for the users. Their insights were turned into a bespoke SaaS solution by Chief Product Officer, Dave O’Flynn, who has taken lessons learned from Australian software giant Atlassian to drive the Engage story.
Engage has created a cloud platform that enables the recruitment eco-system to share the data required throughout the highly administration-intensive recruitment process. This “sharing” platform is efficient and transparent, giving clients protection against the considerable risks associated with data protection, which are to be enforced when new GDPR legislation comes into effect later this year. Engage’s platform is hosted on Amazon Web Services to ensure reliability, accessibility and security.
Dave O’Flynn, Chief Product Officer at Engage said:
“We identified a huge gap in the market and set about becoming the first to create a viable, full-service solution to improve a recruitment and payroll process that desperately requires modernisation – a complete technology overhaul. Our product is not a hard sell – it’s a win for everyone that uses it. We offer a no-cost, low-risk trial which quickly demonstrates greater efficiencies and transparency for every player in the recruitment process, saving time and ultimately money. Following several years of work with early customers, we’ve reached product-market fit and we are now seeing an exponential growth in demand.”
Since inception five years ago, the Company’s growth has surpassed even its own expectations and Engage is having to rapidly scale the business to cope with increasing demand. The Company has been funded through a series of private placements, raising a total of £7.5 million to date with a target of £9.5 million. To reflect its rapid growth trajectory and proven business model, the most recent funding round saw the valuation of the business double to £30 million in under a year. With monthly recurring revenues jumping in the last quarter by 40% and forecast to achieve similarly impressive growth in H1’18, Engage is one of the rare early-stage tech stories that can see profitable operations on the near horizon.
The market opportunity
The recruitment industry, currently valued at about £35 billion i per annum in the UK and up to £349 billion ii worldwide, is a vast and fragmented market. The recruitment eco-system consists of recruitment agencies, hirers, workers and payroll companies. The problem currently faced by the industry is one of inefficient sharing of information leading to significant loss of time, duplication and even fraud in the recruitment process.
Whilst the recruitment eco-system currently uses technology platforms such as vendor management systems (VMS) to process data, Engage is the only full-service offering that exists for end-users and simplifies a traditionally disjointed process. As a disruptive technology product, the principal challenge faced by Engage is industry adoption, however the Company has gained impressive traction and is beginning to accelerate momentum as a result of word-of-mouth and cross pollination within its target markets.
Early industry success
Current clients using the platform include end hirers such as Black Sheep Coffee and Apleona (global facilities management), leading recruitment agencies such as Premier, and payroll companies including Ship Shape Pay. To date, the key target sectors have been catering, hospitality and construction given their reliance on temporary workers, however Engage is making headway into other sectors including technology, with a number of top recruiters providing IT contractors to the City via the platform.
Engage currently has 38 corporates using the platform, with a further 12 in the trial stage, which the Company expects to convert to paying users in the near-term. A recently completed agreement with a leading engineering company will see Engage used as the technology platform for 3,500 temporary contractors on the HS1/2 infrastructure project, thereby demonstrating the significance of individual contracts and the scalability of the business model. Deals such as these also leads to aggregation of the recruitment agency market, with up to 20 agencies being aggregated at once, resulting in organic third-party marketing that is gaining momentum with each new deal. Furthermore, by integrating with market-leading HR workforce management systems Engage is now servicing some of the largest hospitality and retail clients.
Commenting on Engage’s growth strategy, Hughes adds:
“We have been successful with our growth strategy to date and have largely focused on the UK temporary workforce as this is really the lower hanging fruit with the highest need for our solution. We always knew that our success in this primary market would open the door to the secondary UK PAYE market, however, if we are honest, this has probably occurred sooner than we anticipated and are now faced with significant opportunities in the larger secondary market. Our longer-term opportunities include international expansion, as the problems faced by UK market are prevalent worldwide and we are not aware of anyone else offering a viable solution such as ours.”
Engage has reached an inflection point whereby it has proved its product and business model, and will now begin the process of scaling up the business. As with any early-stage business, growth requires investment and investment drives growth. Further investment will be required in the coming year as the company scales up its business in terms of engineers and marketing to meet the growing demand, as well as consider strategic growth routes including M&A. To this end, the Company is considering a number of funding options, including an IPO on
London’s AIM market.
With regards to the near-term outlook, Hughes adds:
“2018 is set to be an explosive year for Engage as we leverage the considerable groundwork we have put in developing our product and building our network and profile. The forward pipeline is looking very strong and we expect the trend of automation and self-serve to continue which will further accelerate our growth momentum. We are looking at all options, including a possible AIM listing, as we seek to capitalise on our compelling growth opportunities and consolidate our position as a market leader in this space.”