AI-powered recruitment tech Sapia.ai closes $17m Series A as it eyes US expansion

A Melbourne-based recruitment platform used by the likes of Qantas (ASX: QAN), Woolworths Group (ASX: WOW) and Big W to hire people within hours has closed a $17 million Series A funding round led by Macquarie Capital and W23.

Sapia.ai’s capital injection comes eight months after it raised $7 million in a funding round backed by global recruitment firm Hudson, Yarra Capital Management chair Dion Hershan, Melbourne investor Leigh Jasper and former Macquarie Corporate Advisers chair Jim Craig.

Originally called PredictiveHire, the company will use its latest funds to scale aggressively in the US, where currently 10 of its 50 enterprise customers are based. It also plans to make its platform available in multiple languages.

“We've effectively developed new science and homegrown innovation. We can understand people from language,” Sapia.ai founder and CEO Barb Hyman told Business News Australia.

“From a short chat, we understand your personality traits and behavioural competencies - whether you're someone that's highly driven, a good thinker, [and] able to work well with people. We gather the data, which is the responses that people give to a structured interview typically for high-class companies like Amazon, BCG and McKinsey.

“Everyone is asked the same behavioural question. It asks you to reflect on your background, your career moves, success and learnings. Then they're measured against the same rubric, but we're doing it in a format which is mobile, experiential, fast, and most importantly - blind.”

Founded in 2013, Sapia.ai offers an AI smart interviewer, which is a chat interview where candidates answer five questions in their own time via mobile or desktop. If successful, prospective employees are automatically progressed to a video interview in which they record responses to questions in a chat.

Hyman explained that the process is customised for each brand, allowing them to choose whether offers are sent automatically or vetted by an in-house hiring team.

“When there are no recruiters required, you're able to make offers within an hour or 24 hours. With Woolworths, they reduced time to hire by 10 days, which is really significant,” she said.

“For other companies, you might go through one final round with the people leader or the hiring manager. It's very customised to the organisation depending on the role and their preference to engage one-on-one with a candidate or not.”

Regardless of whether or not candidates are successful for the role, they are emailed a report with insights into their personality, as well as personalised coaching advice.

“Everyone gets feedback, which is completely new on a global level because most times you apply for a job you get nothing. People often think the human touch is best but the reality is there is no human touch - there's just ghosting," Hyman said. 

“Whereas, from this product, everyone learns. The individual learns, which makes them feel more self-aware, motivated [and] confident. The company learns - they get to a score on whether someone is a good fit for a role and they get an explanation of why that person is scored the way they are.”

She also noted that 40 per cent of the company’s clients are in the retail vertical, which it plans to target aggressively as it looks to expand in the US. Other key verticals include airlines such as Jetstar and Canada-based Lynx Air, as well as contact centres and the business process outsourcing (BPO) market.

“As we move into the US we're going to triple down on retail. Particularly what we call premium retail, which are businesses that care really deeply about the experience that candidates have because they're also their consumers. [They] also want to drive change on the diversity front," Hyman said. 

Macquarie Capital Venture Capital business co-founder Dan Phillips said that his team was impressed and excited by the technology solution that Sapia.ai has created and how it is using AI to provide a better way for companies to approach and solve for diversity and inclusion.

“We’ve all been talking about the value of diversity for some time, but many companies are still not equipped to bring about real change. This is primarily because we fail to acknowledge our human biases,” he said.

“Sapia’s smart chat interviewer has redefined what a fair recruitment process can be. It is blind, it is efficient, and it is backed by valid, peer-reviewed science.”

W23 managing director Ingrid Maes said the program had helped reshape Woolworths’ hiring process and improved the experience of candidates applying for roles.

“Woolworths is always recruiting and we see tens of thousands of applications processed annually in our supermarket business. This new technology positively impacts bias during the recruitment process,” Maes said.

“Not only does it provide a flexible platform for our recruitment teams, we’re really pleased with the experience our applicants have in the process ultimately delivering the hiring and equality outcomes we strive for across the group.”