Job-hunting for those close to leaving or just out of college is a different ballgame these days than it used to be. Gone (at least for now) are the open job fairs and so-called milk rounds where prospective employers go en masse to tap student bodies for potential new entrant hires. In their place, virtual fairs run by startups like Handshake. Today, the company, which has built a platform for professional networking and graduate recruitment aimed at the wider and diverse breadth of college students, is announcing a hefty round of funding — a sign of how it has capitalized on the new landscape and found a healthy place for itself within it.
The startup has closed in on $80 million, a Series E that it has confirmed values Handshake at over $1.5 billion. Lightspeed Venture Partners and Spark Capital co-led this round, with first-time backers Coatue Management and Valiant Peregrine Fund also investing, alongside Handshake’s previous investors. (That list of previous backers is a pretty illustrious list: EQT, the Chan Zuckerberg Initiative, Omidyar Network, Reach Capital, True, Kleiner Perkins, and GGV are among them.)
“Covid-19 has had a massive effect on our business,” CEO and co-founder Garrett Lord told me in an interview. Key to that has been a new video product that Handshake built, which powers its virtual career fairs and interviews between prospective recruits and organizations. “It’s all centered around video recruiting with more than 90% of our university partners using our video solution. That’s really important for them because they [recruiters and those working in career services at the schools] are all under a lot of pressure to show results. They moved to our virtual products because they could facilitate those connections.”
The valuation is a big hike compared to its previous round (also $80 million, as recently as last October), and comes as the company is recording a lot of momentum in the market.
It has been doubling revenue every year for the last three, and is now on track for $100 million in annual recurring revenue. The platform now has 18 million students and young alumni hailing from 1,200 educational institutions including four-year colleges — with the recent additions of the wider extent of higher learning, in the form of community colleges and boot camps, now also bolstering those ranks. It said that a full 49% of U.S. college graduates from 2018-2020 received job offers via Handshake.
Meanwhile, the third part of Handshake’s marketplace alongside students and their colleges — the organizations doing the recruiting — is also really digging in. It now has 550,000 companies on its rolls using Handshake to connect with individuals. That includes no less than 100% of the Fortune 500. And it notes that with companies getting more serious about diversity and inclusion, the companies’ engagement on Handshake is only growing. The startup said that 98 million virtual student-employer connections were enabled on its platform last year.
When I previously covered Handshake (see stories here and here), what really stood out to me about the company was how it was building and gaining traction addressing a very significant and often-ignored parts of the workforce, groups traditionally underrepresented in hiring in graduate roles.
Hires for these roles traditionally skew towards white males, and for the most competitive jobs, towards a select coterie of institutions. The mission of Handshake — founded by Garrett Lord (CEO), Scott Ringwelski (CTO) and Ben Christensen (a board member), three friends who hailed from a technical university in Michigan — was to break those models and barriers by creating a network that catered to a much wider range of historically Black colleges, and simply a wider range of institutions to improve the ratios.
In doing so, Handshake has carved out a place for itself as a kind of complement, or even competitor, to LinkedIn in this area. (It’s a complement if you think LinkedIn has squared away its ambitions for building professional networking and social-network-based recruitment for the rest of the wider working world; competitor if you think that LinkedIn has a viable chance of working out how to do this specifically for younger users earlier on in their careers, and those from historically underrepresented groups — both of which it’s never done outstandingly well.)
What’s interesting is that while there have been a lot of worries over how the graduate job market and students would fare in a Covid-19 landscape, Handshake has found a way ahead to match our current times. Specifically, it’s doubled down on virtual recruiting fairs and other ways of facilitating connections and conversations between its users and the organizations that want to hire them.
This funding, Lord tells me, will be used to continue developing the company’s technology and tools that it provides to its users. Interestingly, the company does not believe that its development is best-served by trying to mimic a LinkedIn experience, however: no plans for online education or professional development, or sharing content and news related to your professional life, but more work on improving recommendations and perhaps extending out the number of years where a user might find Handshake useful.
“We know where users went to school, and what they were looking for in a job,” Lord said. “What makes us different is that everyone is searching at the same time and that means a ton of information we can work with.”
Investors are happy with the focus and how Handshake plans to develop it.
“Since leading Handshake’s Series B in 2016, we’ve been thrilled to watch the company become the clear number one way for students to find internships and jobs, and there is still so much opportunity ahead,” said Will Reed, general partner at Spark Capital, in a statement. “Doubling down on our investment five years later underscores our belief that Handshake will not only help students build the skills and relationships they need to get their first job, but also expand into the $100 billion+ market of helping professionals advance their careers with second, third, and fourth jobs over time.”