The RiseSmart Journey

The Investment thesis for Storm’s investment in RiseSmart was premised on bringing technology to assist in the search for a job. In 2008 the market for Outplacement services was $4 billion. Employers spent that much every year to help employees who had lost their jobs as a result of retrenchment, restructuring or layoffs. These employees needed help in writing their resumes, and needed help in finding a job after having worked for decades at one employer. The $5k to $30k (depending on the seniority of employee) or so cost to the employer was viewed by the employer as a gesture of goodwill as well as important in maintaining a favorable image of the corporate brand. The provider of outplacement services had offices that the laid off employee could go to and administrative assistants who would answer their phones and type and send out their resumes and cover letters. The RiseSmart proposition was to disrupt this $4 billion dollar market by offering a solution that was significantly lower priced, virtual and used sophisticated semantic matching algorithms rather than facilities and assistants to find jobs to match with the needs of the job seeker.

We all remember when the Newspapers we read had 20 + pages of ads for jobs. Till about a decade or so ago most jobs were “local” in nature and an employee had to go to a physical location to do that job. So it made sense to advertise for job openings locally. And the majority of pages in most metropolitan newspapers were the Classified section, with Job Openings being one of the largest category in the classifieds and also a good revenue generator for the Publisher. With the advent of personal computers and networks connecting those computers, many tasks good be done in remote locations. Office boundaries became diffused and employers started looking for employees away from their headquarters or branches and in doing so started using online job boards to advertise their openings. Job seekers in turn had to go to multiple sites to find those openings. And just like Kayak had enabled a traveler to find all the options available to fly from point A to point B, RiseSmart’s vision was to enable a job seeker to find the ideal job, in their preferred location and industry; with the right title and compensation.

Fortune 1000 companies loved RiseSmart’s value proposition and within 3 years over 300 of them had signed up. The lower price enable these companies to offer transition concierge service to a broader set of employees. And the intelligent algorithms cut the time to find job match, offer and acceptance to less than 99 days.

RiseSmart’s success attracted M&A interest from some of the bigger players and the team agreed to become part of Randstad in September 2015.

Personally I would have preferred to stay independent, but the senior team felt they needed to be part of a broader HR solution set. Our bias as investors is to get home runs or grand slam home runs, but we have to also be happy with singles and doubles.