Tag: 15five

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15Five, a pioneer in talent management HR tech, raises $52M to boost its own performance

15Five — an early mover in the world of building technology to help motivate teams, and to improve performance management for execs overseeing those teams — has raised $52 million in a round of growth funding that it will be using to expand its own performance.

Now in use at some 3,400 companies — customers include Credit Karma, Spotify and Pendo, with its sweet spot specifically on businesses with between 100 and 2,500 employees — the startup will double down on what David Hassell, the CEO and founder of 15Five, describes as not just as providing insights, but also outcomes, ushering in a wider move into areas like coaching and education to expand a platform that today is used to help track and set goals for teams and individuals in them.

“We’re going to continue to innovate and focus on the things that actually produce the results,” he said.

Quad Partners — a specialist investor focusing on in education and “workforce” technology — is leading this round, with Edison Partners, Next47, Origin Ventures, Matrix Partners, Point Nine Capital, and New Ground Ventures also participating. Hassell said the startup was not disclosing valuation. Prior to this it had raised around $42 million, with its last round pre-pandemic, a Series B of $30.7 million in 2019.

The intervening years since that last round have been a big fillip to 15Five and its mission as a company. Specifically, Covid-19 and its impact on how people work, and their productivity, under new circumstances such as working remotely, have put a spotlight on how organizations manage those teams, and how workers are impacted by those new conditions. Tools like 15Five’s found themselves in an interesting position: whereas previously some might have considered tech to help shape and work towards goals as potentially nice to have, in the absence of being able to see and work with teams in person, those tools suddenly tool on an essential role. In the best-scenarios, where the tools themselves are solid and used well, for managers, they gave them important insights into how people were doing; for workers, it helped them identify and give shape to what they were doing and where they were going, and wanted to go in their jobs.

“It has been very interesting to see how the whole world has kind of come in our direction and how things have evolved to because when we first started,” Hassell told me. In the beginning, his mission was to solve a problem for, as he put it, “CEOs and managers because HR was more administrative at that time.”

Nowadays, HR has become significantly more complex and the legacy tools that HR teams have used have really started to get reassessed, opening the door to companies like 15Five bringing more functionality and scope to their work.

“We are now, I think, probably the only HR tech platform that was built atop a powerful manager platform because that’s what we started out building,” he said.

There are any number of enterprise software companies in the market today that are addressing the challenges in HR, enterprise training and education, and performance management, but what makes 15Five unique among them is how it is integrating all of these, and how it’s doing it first and foremost from the perspective of performance management, which is a subtle but important distinction as it informs how, say, educational and training tools are built and incorporated, and to what end. It also opens the scope very interestingly into how the tech can evolve.

“We’ve invested a lot in the education space and in businesses that help human beings at every age become empowered and ultimately feel fulfilled,” said Connor O’Keefe, principal at Quad Partners, in a statement. “Education and personal growth doesn’t stop when you get your four-year degree. It’s a natural extension for us to help companies facilitate professional development in other organizations by assessing people, training managers, and being able to make rapid improvements in individual and business performance. What was compelling to us, and led to our investing in 15Five, is its cohesive mission and vision. Personal growth is at the crux of everything 15Five does.”

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15Five raises $30.7M to expand its employee development toolkit

Technology has been used to improve many of the processes that we use to get work done. But today, a startup has raised funding to build tech to improve us, the workers.

15Five, which builds software and services to help organisations and their employees evaluate their performance, as well as set and meet goals, has closed a Series B round of $30.7 million, money that it plans to use to continue building out the functionality of its core product — self-evaluations that take “15 minutes to write, 5 minutes to read” — as well as expand into new services that will sit alongside that.

David Hassell, 15Five’s CEO and co-founder, would not elaborate on what those new services might be, but he recently started a podcast with the startups “chief culture officer” Shane Metcalf around the subject of “best-self” management that taps into research on organizational development and positive psychology.

At the same time that 15Five works on productizing these principles into software form, it seems that the secondary idea will be to bring in more services and coaching into the mix alongside 15Five’s existing SaaS model.

This Series B is being led by Next47​, the strategic investment arm of manufacturing giant Siemens. Others in the round included Matrix Partners, PointNine Capital, ​Jason Calacanis’s LAUNCH Fund​, Newground Ventures, Bling Capital, Chaifetz ​Group, and ​Origin Ventures (which had led 15Five’s Series A). It brings the total raised to $42.6 million, but Hassell said that while the valuation is up, the exact number is not being disclosed.

(Previous investors in the company have included David Sacks, 500 Startups and Ben Ling.)

15Five’s growth comes at a time when we are seeing a significant evolution in how companies are run internally. The digital age has made workforces more decentralised — with people using smartphones, video communications and services like Slack to stay in constant contact while otherwise working potentially hundreds of miles from their closest colleagues, or at least not sitting in one office altogether, all the time.

All well and good, but this has also had an inevitable impact on how employees are evaluated by their managers, and also how they are able to gauge how well they are doing versus those with whom they work. So while communication of one kind — getting information across from one person to another across big distances — has seen a big boost through technology, you could argue that another kind of communication — of the human kind — has been lost.

15Five’s approach is to create a focus on building an easy way for employees to think about and set goals for themselves on a regular basis.

Indeed, “regular” is the operative word here, with key thing being frequency. A lot of companies — especially large ones — already use performance management software (other players in this space include BetterWorks, Lattice, and PeopleGoal among many others), but in many cases, it’s based around self-evaluations that you might make annually, or at six-month intervals.

15Five’s focus is on providing a service that people will use much more often than that.  all the time, by way of sending praise to each other when something positive happens (it calls these “High fives” appropriately enough), as well as regular evaluations and goals set by the employees themselves.

Hassell said in an interview that this is in tune with what modern workplaces, and younger employees, expect today, partly fuelled by the rise of social media.

“Most millennials will get feedback on what they eat for breakfast more than what they do at work,” he said. “The rest of our lives exist in a real-time feedback loop, filled with continuous in positive reinforcement, but then you go into work and have an annual or maybe biannual performance review? It’s simply not enough.” He said that he knows some millennial employees who have said that they will not work at a company if it’s not already using or planning to adopt 15Five, and since talent is the cornerstone to a company’s success this could have a significant impact.

The startup was born in San Francisco in more than one sense: it’s based there, but its principles seem to be uniquely a product of the kind of self-reflection and self-care/quality of life emphasis that has been associated with California culture for a while now, even admist the relentless march that comes with being at the epicenter of the tech world.

In that regard, its newest investor, Next47, will help put 15Five to the test, both in terms of how the product will be adopted and used at a company whose holdings are as much manufacturing as technology, and in terms of sheer size: Siemens globally has around 400,000 employees.

Matthew Cowan, a partner at the firm, noted that while Siemens is currently not a 15Five user, the thinking behind the investment was strategic and the idea will be to incorporate it into the company’s practices for helping employees’ progress.

“It’s very representative of how the workplace is transforming,” he said