Recent patterns in job board M&A

As you may remember, I try to keep an eye on the acquisitions and sales in the job board industry – in other words, job board M&A. Why? Well, first of all, I always need fresh ammo for responding to the ‘are job boards dead?‘ question that gets tossed my direction every now and then. The M&A activity is also an indicator of sorts as to the interest the sector holds for investors. So given that we’ve had some recent activity (see this post), I thought it might be worth a longer look at what’s happened this year – apart from or in spite of the pandemic.

For perspective’s sake, I tracked 29 sales events in 2019 (and remember – I try but my information is hardly comprehensive – I just try and capture as much publicly available data as I can!). In other words, just over 2 events per month.

So what does job board M&A in 2020 look like thus far? I count 21 thus far (December is obviously not included), starting with the acquisition of SelectLeaders by BISNOW Media back in January, and ending with the purchase of Zarplata by the Russian site Headhunter.ru in late November. So even if there are a few more in the coming four weeks, I suspect that 2020 will be slightly less active than the preceding year.

Now, let’s think about the year from the perspective of buyers and sellers. What were the factors that might have affected activity?

1. The pandemic and resultant catastrophic drop in employment, starting in March. With many businesses shut down, demand for new hires collapsed.
2. Beneficiaries of the pandemic. Think: online retailers. Logistics. Telehealth. Online conference and remote work service providers. Etc., etc., etc. Like a balloon that had been squeezed, some of the lost demand for workers reappeared in other segments.
3. Panic selling. If you’re a job board or recruiting site and 70% of your business vanishes, you might consider selling or shutting down. Particularly if your business was wavering to begin with. (For example, consider Hired….).
4. Disappearing workforce. It’s still early days, but there appears to be a permanent loss of at least some portion of the workforce. They lost their jobs and they decided not to return to work. We don’t know how big that is, or where it will affect the workforce most – but it seems to be real. At some point, in some way, those ‘vanished’ workers will have to be replaced.

Looking at some of the acquisitions in light of the above, you can see patterns emerge. There are those companies that are acquiring properties that make them more competitive in a suddenly remote-work world: Stepstone buying Cammio, a video recruiting business, for example. Then there is what you can only call ‘opportunistic purchases‘, such as the afore-mentioned sale of Hired to Vettery, or the purchase of AllyO by HireVue. In both cases, the properties purchased were struggling – and I suspect the price paid was, well, pretty darn low.

Then there are examples of job board M&A trends continuing from 2019. For example, the purchase of programmatic provider IGB by VONQ, and the acquisition of NGCareers by Jobberman. Advinta’s purchase of aggregator JobIsJob falls into this category as well. Market consolidation, programmatic, and more aggregation – yep, we’ve seen these before!

What we haven’t seen is as much activity in the freelancer realm, even as Upwork and Fiverr continue to solidify their market leader status. And – just like 2019 – most of the M&A activity was outside of North America. We know the job board industry is global – and sometimes the data prove that.

So what will the new year in job board M&A bring? I suspect that a very gradual growth in labor demand will parallel the distribution of the COVID vaccines – which in turn will lead to similar growth in job boards and recruitment marketing. But – as always – growth will be uneven, and unevenly distributed. In other word, job board M&A in 2021 could be an interesting year!

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