Photo Credit: Dirk Wouters from Pixabay

The global online recruitment market is expected to grow at a 7% CAGR from $29.3 billion in 2021 to $47.3 billion by 2028. Santa Monica-based ZipRecruiter (NYSE: ZIP) went public earlier this year and continues to deal with the uncertainties of the pandemic world.

ZipRecruiter’s Offerings

ZipRecruiter was founded in 2010 by Ian Siegel, Joe Edmonds, Ward Poulos, and Willis Redd. The idea behind ZipRecruiter came to Ian when he was working for a few start-ups that were too small to have HR departments. He was posting jobs to multiple job boards himself to hire people and realized the difficulties faced in the process. He wanted to set up a service where jobs could be posted across multiple job boards at the click of a button and help gain access to a viable talent pool.

With his other co-founders, he set up ZipRecruiter as a side project to help small businesses distribute job postings at an affordable cost. What began at his kitchen table is now a leading online employment marketplace that leverages AI-powered smart matching technology to actively connect millions of employers and job seekers. It claims it is a matchmaker for the job seeker and the employer, helping them find the right fit. It operates on a self-perpetuating business model. By attracting the number of jobs on its marketplace, it is able to attract more job seekers. As the number of job seekers increases, that in turn attracts more employers who in turn post more job opportunities on its marketplace. This network effect increases its data and accelerates the rate at which its matching technology gets smarter over time.

ZipRecruiter has worked with more than 2.8 million businesses and 110 million job seekers on its site. Jobs posted on its platform are distributed to over 1,000 sites managed by its Job Distribution Partners. Immediately after a job is posted, its AI technology presents the employer with a list of potential best-fit candidates in the market. The employer can then invite the potential candidates to apply. Its AI and ML tools keep learning from this interaction between employer and potential employee to determine the right candidate for the job. It provides employers with access to 14 million monthly Active Job Seekers with wide skill sets and experiences.

Earlier this quarter, it also announced an integration with Worthy by City, allowing job seekers to understand and acquire the necessary skills to transition into a new industry. The integration will allow job seekers on ZipRecruiter to find opportunities matching their skills and to be found.

ZipRecruiter’s Financials

ZipRecruiter provides several pricing plans to best suit an employer’s needs. They can select flat-rate pricing on terms ranging from a day to a year or performance-based pricing for those who wish to run more sophisticated recruitment campaigns. The global pandemic had hurt its revenue growth last year, but things seem to be changing.

Revenues in 2020 fell 2.8% from $429.6 million in 2019 to $418.1 million. From a loss of $6.3 million in 2019, it swung to a net income of $86 million in 2020. For the recently reported third quarter, ZipRecruiter announced revenues of $213 million, up 107% and net income of $0.17 per share.

For the fourth quarter, it expects revenues between $203-$209 million, and for the fiscal year, it expects revenues between $724-$730 million.

ZipRecruiter went public in May this year. Before going public, it had raised $219 million in two rounds of funding from investors including Industry Ventures, Institutional Venture Partners, and Basepoint Ventures. The most recent round was held in October 2018 for $156 million. Its list price was $18 and it was valued at $2.4 billion. It is currently trading at $24.38 with a market capitalization of $2.8 billion.

ZipRecruiter faces a highly competitive marketplace. Sites like Indeed.com, Ladders, and many are already dedicated to helping employers and employees find a suitable match. Additionally, there are bigger players like Microsoft-owned LinkedIn, and even Google that is helping with the job search process. The recent pandemic has added significant uncertainty to the recruitment process as well. The “great resignation” coupled with the current uncertain economic conditions are causing significant anxiety in the job market.