You probably haven’t heard yet of four-year-old ZipRecruiter, a profitable, L.A.-based online hiring platform for small and medium-size businesses. In recent months, though, plenty of growth-stage equity firms were kicking its tires and hoping the company might bring them aboard as investors. In the end, its four cofounders agreed to a $63 million round led by Institutional Venture Partners, with participation from Industry Ventures and the brand-new L.A. firm Basepoint. I talked with one of those cofounders, ZipRecruiter CEO Ian Siegel, last week about the company’s low-flying trajectory so far.
You spent 20 years working for L.A.-based startups. Why start ZipRecruiter when you did?
My experience and my cofounders’ experience was the same. Because the companies were so small where we were working, there was no HR department, no one to do hiring for you but you. So I was the only one posting jobs. I was the one vetting candidates and making decisions about who and when to hire. Part of the reason those companies stayed small was it was so painful to bring another person on board. We weren’t HR professionals. We just thought, Let’s build something that would be useful for us. And it took off. We’ve been profitable since our first month.
What’s so special about your technology?
What ZipRecruiter does is take a set of services that have been used by Fortune 500 companies, from an applicant job tracking system to easy-to-search databases, and [offers these technologies] to small and medium-size businesses. The value for our customers is they can post a job to many job boards at once — Monster, Twitter, Glassdoor; more than 50 at once — then we present them with candidates from all of those places in one, easy-to-review [interface] so they can screen and track candidates.
This is a SaaS business. How much do you charge users?
We charge $129 [per month] and scale up depending on how many jobs a company has to post. Some customers post [a lot of] jobs, and it’s more than $1,000 per month.
You say you’ve been growing like a weed. Give us some metrics.
At the beginning, it was pretty much four founders who were rotating between each other’s kitchens. I took every customer support email and phone call. A dog would be going crazy in the background, and I’d say, “I don’t hear a dog, do you hear a dog?” Now, we’re moving into a 40,000-square-foot space in Santa Monica. We have 150 employees, tens of millions of dollars in annual revenue and we’ll have more new subscribers this year than in all previous years combined. We’ll have 100,000 customers in the relatively new future.
You’re already very profitable, by your own account. How will you use the money you’ve just raised?
More than 7,000 new businesses create an account on ZipRecruiter each month and the primary person [who signs up] is the person who manages HR. And that person is responsible for hiring, but also, potentially, for payroll, insurance, vacation tracking, and for on-boarding. So we’ll do a bit of development into new areas and see what the reaction is. When you’re bootstrapping, everything has to come back to bottom line. Taking investment really frees us as to how much more can we do to make the job of HR managers easier.
How are you reaching all of these far-flung customers?
It was all driven through [search engine marketing] initially. As we grew, we began to benefit from word of mouth — a substantial double digit percentage of our new users come without a marketing source attached to them. But because the product sells so well, we’ve been able to branch into direct mail, TV commercials, and radio. The challenge of going after a disaggregated market is finding [all your customers]. You can’t just buy ads on Google.
Photo of Ian Siegel courtesy of ZipRecruiter