If you ask most business owners or operators what their biggest challenge is, it’s likely employee retention will rank pretty highly on their list.
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Now, an Austin-based talent management SaaS (software-as-a-subscription) startup focused on helping companies and HR managers not only retain employees, but better engage with and coach them, has raised $4 million to grow its business.
Linda Ginac founded what is now TalentGuard in 2010. For the first few years, the company operated as a career coaching consulting business. Human resource professionals ended up being the primary client and many asked about applying the methodology internally to their own organizations via automation of the technology. So in December 2013, Ginac pivoted TalentGuard from a consulting company to a software one focused on career coaching. She landed her first beta customer in April 2014 and says revenue has grown 200 percent year-over-year since.
Along the way, Ginac said, the company was essentially bootstrapped — only raising a total of $3.5 million from angel investors over the course of nine years.
Austin-based LiveOak Venture Partners led its latest round, which also included participation from a number of individuals including former Spredfast CEO Rod Favaron (who was also the former CEO of Lombardi Software, which was ultimately acquired by IBM); and Horizon Bank Chairman and former Dell CFO James M. Schneider.
Currently, TalentGuard has 27 employees in the United States and Mexico and more than 80 customers ranging from small businesses to Fortune 500 companies. Examples include BlueCross and BlueShield of Tennessee, Allstate and Zurich Insurance.
“Typically, our customers are in high turnover industries such as retail, financial services or hospitality,” Ginac told Crunchbase News. “Those sectors in particular seem to have a hard time recruiting and keeping talent. And usually the number one reason is a lack of career development.”
TalentGuard plans to use its new capital for attracting more customers and expanding its footprint both in the U.S. and globally. It has an office in Mexico City and plans to open another location in Ireland in Q4 of this year. It also plans to hire another 25 employees by year’s end, with a particular focus on sales and marketing staff.
“We have clients in Singapore, Abu Dhabi, Germany, Thailand and Egypt, for example,” Ginac said. “We want to be closer to our customers.”
The company also plans to use the money to add more artificial intelligence and machine learning bots into its software “to make it smarter,” Ginac said, especially in the area of predictive people development. What does that mean?
“We want to be able to take lots of information and predict a targeted and personalized skill development plan,” she explained.”The goal is to give employees a way to develop a curated learning development plan that they can execute on and thus help increase the chance of them staying on longer at a company.” In addition, Ginac added, TalentGuard aims to “make it easy to develop and evaluate skills, connect with mentors, and have more meaningful conversations with management.”
LiveOak’s Srinivasan told Crunchbase News his firm “have been blown away” by TalentGuard’s “incredible grit and tenacity to create a comprehensive talent management platform” with so little external money.
He also said that LiveOak views the company as an “early pioneer” in its space.
“We like their clever use of AI and believe in general, the HR tech management space is incredibly hot,” Srinivasan added. “And in TalentGuard, we see a platform that can drive strong employee engagement and retention.”
Illustration: Li-Anne Dias