Tech recruitment platform Karat snaps up Triplebyte to add AI-based quizzes for engineers
- March 16, 2023
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The tech industry continues to see a growing list of layoffs — which now totals nearly 139,000, according to Layoffs.fyi — but given the broader job market, the overall pace of hiring engineers and other technical talent hasn’t slowed. Now, one of the bigger players in tech recruitment is making an acquisition in a consolidation game to better capitalize on the opportunity. Karat, a tech recruitment platform last (2021) valued at over $1 billion, acquires Triplebyte, a smaller but very well-connected player in the same space that has developed and delivered adaptable technical skill tests for engineers, and then helped put her on the radar for jobs that matched her skills.
Financial terms of the deal are not disclosed, but from our understanding Triplebyte appears to have reached the end of its funding round, a story not uncommon in the current market. The deal includes Triplebyte’s core assessment products and content library, but its “Magnet” talent network will be wound up later this month. (Any underlying data used for analytics is anonymized, Karat said.)
Triplebyte – founded by Harj Taggar, Guillaume Luccisano and Ammon Bartram (the current CEO) – raised nearly $50 million. It never disclosed its valuation, but in 2019, when the company raised $35 million, Taggar (who was still with the company and CEO) told me it was “hundred-million multiples of being a unicorn.” “. Pitchbook puts it at a more modest-sounding $135 million.
Karat itself is backed by companies such as Tiger Global, Norwest Venture Partners, 8VC, Exor, Base Partners and Sempervirens Fund. Mohit Bhende, Karat’s founder and CEO, said it did not need to raise additional funds for this acquisition — and has no plans to raise more in this current market.
While Karat and Triplebyte both address the world of tech recruitment, they do so from different angles.
Karat has built what it calls the “Interviewing Cloud” — a suite of tools and services that enable recruiters to run tech recruitment campaigns. It says its platform hosts “hundreds” of interviews every day, with clients including big global brands like Walmart, Roblox, and Indeed.
Triplebyte, meanwhile, has developed a platform for engineers to run adaptive tests, the results of which are used to get on recruiters’ radar based on their respective skills. It’s a very tech-first startup: the “adaptive” part of the platform is a nod to Triplebyte being built around machine learning, which tailors the tests to highlight and deepen specific skills. According to the company, there are tens of thousands of engineers on the platform today.
The idea will be to bring these two companies closer together in an end-to-end strategy: recruiters will have a range of tools they can use to screen candidates as part of the Karat platform; and Triplebyte will now have a steadier stream of recruiters tapping into its candidate database.
“Our goal at Triplebyte was to make real-world technical skills the most important requirement for getting a chance at a job in engineering,” Bartram said in a statement. “By combining our adaptive assessment technology with Interviewing Cloud, Karat creates a unique solution that eliminates pedigree bias, excites candidates and delivers an unparalleled hiring signal.”
Bhende also noted that there may be longer-term opportunities to use the technology that Triplebyte has developed and is developing to bring more automation to the currently very human-centric process that Karat has built. Although plans are very early there, this could include adaptive prompts and help for recruiters in terms of the types of questions they can ask and answer in interviews.
There are still many fields of action to make digital platforms more suitable partners for better inclusion in the labor market.
Bhende noted that one of the strongest points of the Triplebyte platform was the potential to use it to eliminate bias in recruitment, as its automated approach allows it to accept large numbers of applications – and theoretically everyone who applies would like – which means that the initial standard for any job may not be any screening at all. (Of course, this is a work in progress, as bias and accessibility can come in many forms.) For its part, Triplebyte has made an effort to encourage inclusion on its platform and alongside other startups in the computing community.
All this talk of more opportunities for everyone is a bit ironic considering Triplebyte’s own beginnings, with many advantages other startups lack as they step into the world of technology, acquire customers and raise money.
Prior to co-founding the startup, Taggar was (and still is) a longtime partner at Y Combinator, and before that he had founded and sold a company with Patrick Collison (who later founded Stripe himself). Founded on the famed accelerator, Triplebyte counted a number of YC startups among its earliest customers and those startups’ engineers among the 300,000 who completed tests to build its machine learning algorithms. It also became part of YC’s later-stage continuity investment portfolio, a deal that YC announced this month would be wound up. Other notable investors included Initialized Capital (co-founded by Garry Tan, who is now CEO of YC), Founders Fund, Caffeinated Capital, and dozens of high-profile angels.
Of course, all of this will take you far, but not always to your destination. And in the current market, that endpoint could look very different than it did a few years ago.
The market definitely seems tougher for tech jobs today, but Bhende says demand from Karat’s clients has remained high as the need for tech talent has continued to spread to other industries.
“If Karat is a barometer of the tech industry, then our business with companies undergoing digital transformation has really boomed, and India has boomed,” he said. This means that even with the layoffs and hiring freezes having their own impact, “the hiring puck has shifted. The shortage of engineers is still an issue. Given the demand, there aren’t enough of them.
Regarding the boom in India, he said Karat plans to do a lot more there, with a big demand for both engineering recruitment and finding technical talent from India to fill vacancies around the world .
“The distribution of engineers looks very different and will be different again in two years,” he added.