Jobster CEO Jason Goldberg likes to call his job search web site “MySpace for the workforce.” Given the company had only three million job searches for the month of June, it might be a bit of a stretch. Goldberg, of course doesn’t care, and is pushing to grow his Seattle-based startup fast.
A fresh round of $18 million in venture capital infusion (bringing the company’s total to $48 million) is going to surely help attract new customers, add features and expand internationally. The investment was led by Reed Elsevier Ventures, the VC arm of publishing company Reed Elsevier, and included existing investors Ignition Partners, Mayfield Fund and Trinity Ventures.
The service is a little different than competitors like Simply Hired and Indeed that make money off of advertising on job search pages. All of Jobster’s revenues come from its deals with Fortune 500 employers like Starbucks, Boeing and Google.
Jobster sells its web-based tools to manage finding workers, which cost between $1,000 to $9,000 per month, depending on the companies’ size. It has 400 business customers. There’s enough revenue coming in from that booming business for Jason to say the company will be profitable in the middle of next year. “Well north of $20 million in annual revenues,” is how he puts it. He also says the company’s valuation has “quadrupled over the past 18 months.”
Jason made it pretty clear that the company didn’t really need the money, and that Reed Elsevier Ventures was courting him for 4 to 6 months before he agreed. I was curious as to why take the money at all. He explained it as having lived through the bad times in the dotcom, why not raise the money while he can? Smart guy! And there’s also a slew of job search competitors out there, including MySpace’s actual job pages powered by Simply Hired, so getting big fast is a good idea.
He’s got big plans to offer service in India and China sometime next year he says. It’s ambitious, but so is the company. It already acquired 3 companies even though its just 2.5 years old, and last Thursday launched a new site, which Jason says has pushed the search stats up 50 percent from June.
The new site has got all the Web 2.0 and community-based features you’d expect from a company calling itself the MySpace of the working world. Now that Jobster’s got the new money and the new site, maybe it could come close to bringing in the users to match that moniker.
7 comments so far
7:42 AM PT
Interesting, I’d heard similar things from both Jason Calcanais (for WebLogs Inc) and from PUD (for Adbrite) that they had taken money and just kept it in the bank in case something happened.
9:53 AM PT
I know of this company too well. The investment is troubling. Customer hire rates are below 20 percent through the system and for many customers success rates are lower, putting ROI through the floor. They have lost traction and credibility with many recruiters and those headhunters are the ambassadors of their solution to the HR executives who spend the average of 4-6K per month. Also as a testament to their fledgling success (not growth but success specific to actual hiring numbers) they rolled out a Monster style pricing scheme many months ago in trial form to hundreds of recruiters the majority of whom balked at it. This is 48 million dollars wasted on a potential sale of between 5-10 million 3 years from now for assets and customers. Sorry. Do something else with those funds please. Even their largest flagship original customer (shall remain nameless) has complained of hiring rates to the effect of “4 hires over 8 months from roughly 80 postings in the system” and that really hurts when it comes to renewals.
10:13 AM PT
Why would you take/borrow money you don’t need? Doesn’t that dilute your ownership and control?
It’s like a home equity loan…haha
12:47 PM PT
rather than engage the anonymous poster, i’ll just note that we are cranking on renewals and have dozens of customer case studies. check out my blog to learn more http://www.jobster.blogs.com or visit our corp website at http://www.jobster.com/corp
11:14 PM PT
Michael you have an interesting assessment, however, it’s just that - an assessment. Our hire rates are well over 20% with the system, with a ROI through the ceiling, not the floor. With that, their pricing is competitive. It’s like any other investment or choice a HR or Recruiting Leader makes. It does not surprising me that people point their finger at Jobster - it’s one tool for crying out loud. You won’t get hires through the system if you just sit by the phone. Jobster is considered leading edge by individuals that get the game of recruiting, and is one organization you can call a partner and not a vendor.
5:00 PM PT
[...] attention. From vertical search plays such as Indeed, to new players such as TheLadders, and Jobsters are trying to address some of the inefficiencies of the current online job [...]
7:15 PM PT
[...] application pricing (PPA). They appear to be failing despite the fact that they have had massive financial backing, great technology, extensive marketing and a solid audience. There are plenty of lessons to be [...]
Leave a Comment