Deal focus: Go1 adds layers to booming HR services niche

Australia's latest unicorn is in one of the country's most fiercely competitive categories. Fortunately, it's not competing.

Go1 is one of at least 10 local human resources technology start-ups that have received significant private equity and venture capital backing in recent years. But its mission is to support the pack, not rise above it.

Last week, SoftBank Vision Fund 2, AirTree Ventures, and Salesforce Ventures led a $200 million Series D round for the company at a valuation of $1 billion with notable participation by local recruitment leader Seek. The investment made Go1 the best-funded player in this space, according to AVCJ Research, with $280 million raised since inception in 2015.

Go1 compares itself to Spotify in the sense that it is a media aggregator rather than an original content producer. It plans to develop new B2B services related to professional training, talent management, employee benefits, and skills development – but these will not be aimed directly at end-consumers. The idea is to avoid a vertically integrated offering lest it step on the toes of crucial counterparties.

"Our position in the market is between our supply side partners and our demand side partners. How do we make sure we complement them and we're a neutral party that can bring them together," Go1 CEO Andrew Barnes (pictured) says.

"We're very intent not to create our own content to compete with our suppliers, and we don't want to offer our own HRIS [human resources information system], applicant tracking system, or things of that nature to compete with the businesses we integrate with. We want to focus on a narrow part of the stack."

Go1's content supply partners in Australia include Flare ($50 million in VC raised to date), Ascent (acquired by US GP Strattam Capital in 2018), and Employment Hero (raised a $140 million round last week from a group of investors including AirTree, Salesforce, and Seek). Demand side partners – including Seek and fellow strategic investors such as Microsoft – help connect the content with businesses.

Most of the action for Go1 is outside its home market. In the past 12 months, about half of sales were transacted in the US, versus 30% in Australia, and 20% in fledgling European and Southeast Asian presences. The US is also the fastest growing market, representing 70% of business on a new sales basis. Go1 has about 50 people on the ground in three cities in the country, and this footprint is expected to more than double.

Barnes considers talent management and training content aggregation a discrete new category and Go1 its creator, although competition is likely to emerge soon. It is perhaps inevitable that as the changing nature of the post-pandemic workforce causes the HR services heap to pile ever higher, specialized B2B support must enter the equation. But surviving and thriving as this happens will be to some extent about knowing where to be a generalist.

"Once upon a time, you could be familiar with statistics and that was a simple field. Now, you've got artificial intelligence, machine learning, and deep learning, all these areas in one domain. You can imagine the growing fragmentation in healthcare and financial services," Barnes says. "We can't hope to be an authoritative source for all that. What we can do is bring it all into one place and connect organizations and individuals."

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• Topics
• Australasia
• Expansion
• Support services
• Australia
• Softbank
• AirTree Ventures
• Salesforce Ventures
• Microsoft
• TMT
• professional services