Checkr Buys GoodHire to Capture SMB Background Check Market
In yet another sign that the $47 billion HR technology market isn't slowing down, San Francisco-based HR technology firm Checkr announced its acquisition of competitor Inflection, creator of the GoodHire background check for small businesses. Checkr already had a presence in the SMB arena, but the deal brings GoodHire's "tens of thousands of customers" over, further cementing Checkr's position. While the companies did not disclose the terms of the deal, The Wall Street Journal estimated it was worth $400 million.
The acquisition announcement came soon after the company raised $120 million in Series E funding.
Checkr Builds SMB Presence With GoodHire Buy
Checkr launched its background check technology in 2014 with an eye towards the small to medium business (SMB) market. In the intervening years it has grown to its current $5 billion valuation and counts Netflix, Airbnb, Instacart and Uber among its customers. With the GoodHire buy, the company is seeking to firm up its hold in the SMB space.
“GoodHire serves tens of thousands of SMB customers and was the first background check provider to offer a self-service background check solution specifically designed for SMBs. By acquiring GoodHire, we’re accelerating our expansion into the SMB space. This is our fastest growing business segment and with this acquisition, we will be better equipped to provide our SMB customers with a superior background check experience,” Linda Shaffer, Checkr's chief people and operations officer told Reworked.
The deal will see the two platforms and companies combined under the Checkr name. Inflection CEO Mike Grossman explained in a blog post the two company's mutual commitments: "We share Checkr’s commitment to fair hiring and 'building a fairer future for all,' and they have made significant investments in this area as well, both within their platform and by educating employers about the value of hiring for diversity and inclusion."
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Checkr Seeks to Advance the Entire Hiring Process for Businesses
The GoodHire buy is Checkr's second purchase of 2022. In February it bought Canadian background check firm, ModoHR Technologies. At the time, Checkr CEO Daniel Yanisse said in a statement the buy was a "strategic step towards international expansion" for the firm. In October 2018, it bought skills analytics platform Lytmus, which provides employers data-driven insights for hiring.
“Since our founding we have specialized in background checks and as we move forward will look to improve the entire hiring process for companies. Many companies have an archaic approach to hiring, with processes like onboarding that are time consuming and tedious. It’s time we bring the entire hiring process into the digital age as we focus on enhancing the candidate experience at every stage of the employment process,” said Shaffer.
The hiring crunch driven by the "Great Resignation" has resulted in a flood of VC funding into the HR technology space, with Crunchbase reporting funding more than doubling in the latter half of 2021, to reach $7.5 billion. As businesses continue to struggle with hiring and retention, expect to see further mergers and funding rounds in the HR space in the near future.