In October SAP announced lower outlook for the year causing some concern regarding the wider enterprise software sector. Results reported by other Future of Work businesses, however, suggest a largely stable business environment. Recruitment firms are the notable exception, most of whom expect a 15-20% YoY revenue decline for 2020 and c. 10% growth for 2021. M&A activity has recovered almost fully, while private placements have returned to 2019 levels. Valuations are back to their 2019 highs and the sustained Work Tech tailwinds that we see heading into 2021 are extremely encouraging. 

As expected, September saw a strong recovery both in M&A and private placements for Future of Work businesses. Revenue growth outlook for 2021 is now in-line with pre-Covid levels. Public market valuations reached new highs, particularly in the Productivity and pure HR Tech segments. Private markets seem to be following suit, with M&A tailwinds expected in Q4 and likely also into Q1, particularly as those acquirers who placed a blanket M&A freeze for 2020 re-enter the fray. 

August saw a notable uptick in both M&A activity and private placements for Future of Work businesses, with CD&R’s $4.7bn acquisition of Epicor and HG’s $2.0bn investment in Visma standing out. Most companies reported results ahead of expectations and a cautiously optimistic outlook for 2020. Valuation multiples for pure HR Tech and Productivity companies are reaching new high’s, while Diversified HR Tech and HR Services remained relatively stable.

Venero's July 2020 update for HR Tech M&A and fundraising activity, valuations and peer benchmarking. Review of job market activity by country, and earnings report excerpts from publicly listed Future of Work businesses.

​Review of the June 2020 HR Tech M&A and fundraising activity, update on HR Tech valuations and peer benchmarking, job market activity by country, and key highlights from earnings reports other operational updates.

This market update looks at the April 2020 HR Tech M&A and fundraising activity, presents the latest HR Tech public market valuations, reviews the impact of COVID-19 on the job market (new jobs posted by country in April vs. previous 12 months), and summarises 1Q 2020 earnings reports and updated outlook for selected Core HR, Payroll & Benefits firms, Learning & Development businesses, Talent Acquisition platforms and Recruitment firms (permanent as well as temporary).