Harbor View Advisors Q3 2022 Human Capital Management Report by harborviewadvisors

Human Capital Management

Q3 2022

During Q3 of 2022, the Human Capital Management sector experienced continued softening in transaction activity, following the robust 2021 period There were 67 VC investments this quarter totaling $1 5B compared to the 96 raises last quarter totaling $4 3B Venture and growth investors are scaling back their investment pace due to inflation, rising interest rates and market volatility. While VC investment activity sharply declined, M&A volumes remained strong by historical standards. The Core HR space benefited from these market shifts, as investors and acquirers adjusted their focus to less cyclical areas of HCM.

Staffing: Healthcare and IT Focus

While transaction activity in the Staffing sector decreased quarter over quarter, Healthcare and IT staffing continue to be primary drivers of transaction activity as both segments are beneficiaries of chronic talent shortages Nurse staffing companies continue to be popular acquisition targets For example, travel nurse specialist Prime Time Healthcare was acquired by One Equity Partners and Barton & Associates was acquired by H I G Capital Tech workers continue to be high in demand as the IT staffing sector made up over 23% of the staffing transactions. One example is global IT staffing firm DISYS acquiring the assets of professional services and IT recruiting firm MAKE Corporation expanding its offerings in the IT staffing and professional services space.

Core HR: Payroll and Hybrid Work

The Core HR sector experienced record M&A activity as a percent of total HCM transactions as buyers seek to invest in mission critical solutions. The sector was responsible for 24% of all M&A deals in the HCM space this quarter, primarily driven by providers of payroll and hybrid workforce management solutions. HRIS platform Hibob raised $150M in Series D funding, valuing the company at $2 3B Payroll companies also received the largest share of VC investment this quarter with nearly $300M in capital raised with investments focused on international payroll and on demand pay Hybrid workforce management software is a continuing trend that also accounted for the increased activity within Core HR. For instance, desk booking and team scheduling software OfficeTogether was acquired by workplace experience and space management provider Envoy following Envoy’s $111M Series C raise in January 2022.

Talent Acquisition: International Employee Screening and Healthcare Sourcing

The global workforce is more dispersed than ever, leading to employers expanding their international screening processes and investment in the space has followed. For example, international background check provider Hire Image was acquired by background screening company Orange Tree following its acquisition by Tonka Bay Equity Partners in February 2021 In addition, UK based international screening company Vero Screening was acquired by pre employment screening provider Accurate Background. Also driving talent acquisition investment, healthcare sourcing capabilities have been in high demand reflecting the shortage in nursing and healthcare talent across the globe. For example, platform for sourcing healthcare professionals Matchwell was acquired by one of the largest providers of workforce solutions in the healthcare industry Medical Solutions.

Talent Management: Training, Compliance and Language Learning

Employers are increasingly turning to digital solutions for learning and compliance and investor interest has followed. One example is IT and cybersecurity training platform Cybrary’s $25M series C raise led by BuildGroup. Another deal in the training space was healthcare compliance company Panacea Healthcare Solutions’ acquisition of medical training platform First Healthcare Compliance Language learning companies also received attention from investors For example, digital language training platform Preply raised a $50M Series C at a $360M pre money valuation. In addition, Harbor View Advisors represented language assessment software Emmersion in its sale to online education platform IXL Learning.

HVA’S Q3 2022 HCM QUARTERLY REPORT Q3 HCM SUMMARY & OUTLOOK

1 WHILE VC INVESTMENT ACTIVITY SHARPLY DECLINED, M&A VOLUMES REMAINED STRONG BY HISTORICAL STANDARDS. 50 70 90 110 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Difference Count of M&A Transactions Count of VC Transactions

HVA’S Q3 2022 HCM QUARTERLY REPORT 50 100 150 S&P 500 HR Tech Staffing ONE-YEAR HISTORICAL INDEX PERFORMANCE COMPARATIVE MEDIAN REVENUE MULTIPLES Source: Refinitiv Indices based on equal weighted prices and comprised of: HR Tech | ADP, ASUR, BNFT, CDAY, DHI, FC, HSII, HSTM, KFY, NSP, ORCL, PAYX, PAYC, PCTY, SAP, SGE, TNET, WDAY, XM Staffing | AMN, ASGN, BBSI, BGSF, CCRN, JOB, KELYA, KFRC, MAN, MHH, RGP, RHI, STAF, TBI Excludes companies not traded prior to 9/1/2021 Source: PitchBook, Data as of Sep 2022 TTM HCM PUBLIC MARKETS COMPARATIVE MEDIAN EBITDA MULTIPLES 2 0.6x 2.9x 2.7x 5.7x 0.5x 2.8x 2.4x 5.6x Staffing Talent Acquisition Talent Management Core HR TTM Median Revenue Multiples 6/30/2022 9/30/2022 7.3x 11.8x 19.9x 6.9x 14.9x 13.9x 16.0x Staffing Talent Acquisition Talent Management Core HR TTM Median EBITDA Multiples 6/30/2022 9/30/2022

0.15 1.7x

9.5x

0.7x 6.3x

8.3x

5.8x

0.5x 6.9x

HVA’S Q3 2022 HCM QUARTERLY REPORT Company Name Enterprise Value ($B) TTM Revenue ($B) TTM EBITDA ($B) Revenue Multiple EBITDA Multiple Adecco Group 8.1 24.89 0.96 0.3x 8.5x AMN Healthcare Services 5.4 5.22 0.79 1.0x 6.8x ASGN 5.1 4.36 0.49 1.2x 10.4x Barrett Business Services 0.5 1.01 0.07 0.5x 7.1x BG Staffing 0.1 0.24 0.02 0.6x 6.9x Cross Country Healthcare 1.3 2.56 0.28 0.5x 4.6x GEE Group 0.1 0.17 0.03 0.4x 2.1x Heidrick & Struggles 0.3 1.13 0.13 0.2x 2.0x Kelly Services 0.5 5.01 0.13 0.1x 3.5x Kforce 1.2 1.67 0.12 0.7x 10.4x Korn Ferry 2.4 2.74 0.53 0.9x 4.5x Manpower Group 4.1 20.74 0.73 0.2x 5.7x Mastech Digital 0.2 0.24 0.02 0.7x 8.3x Recruit 42.3 25.99 4.45 1.6x

Resources Connection 0.6 0.81 0.09

Robert Half International 8.0 7.16 0.97 1.1x

TrueBlue 0.7 2.32 0.11 0.3x

Median:

Company Name Enterprise Value ($B) TTM Revenue ($B) TTM EBITDA ($B) Revenue Multiple EBITDA Multiple Coursera 0.8 0.47

n/m Docebo 0.7 0.12 0.00 5.6x n/m Elmo Software 0.2 0.06 0.03 2.6x n/m Franklin Covey 0.6 0.25 0.03 2.4x 19.6x Healthstream 0.6 0.26 0.05 2.4x 13.9x LTG 1.1 0.61 0.10 1.9x 11.4x Qualtrics 5.5 1.28 1.06 4.3x n/m Udemy 1.2 0.57 0.09 2.1x n/m Median: 2.4x 13.9x Company Name Enterprise Value ($B) TTM Revenue ($B) TTM EBITDA ($B) Revenue Multiple EBITDA Multiple DHI 28.1 31.95 7.47 0.9x 3.8x First Advantage 2.2 0.80 0.23 2.7x 9.5x Fiverr 1.2 0.33 0.07 3.6x n/m Sterling Talent Solutions 2.2 0.74 0.10 2.9x 21.7x HireRight 1.8 0.82 0.16 2.2x 11.1x Upwork 1.7 0.56 0.06 3.0x n/m ZipRecruiter 1.7 0.90 0.09 1.9x 18.8x Median: 2.8x 14.9x CORE HR Company Name Enterprise Value ($B) TTM Revenue ($B) TTM EBITDA ($B) Revenue Multiple EBITDA Multiple ADP 96.0 16.05 3.91 6.0x 24.6x Asure Software 0.1 0.08 0.02 1.7x 9.3x Benefit Focus 0.4 0.25 0.01 1.7x n/m Ceridian 9.4 1.13 0.03 8.3x n/m Insperity 3.8 33.83 0.24 0.1x 15.6x Oracle 245.4 44.16 13.18 5.6x 18.6x Paychex 40.1 4.67 2.09 8.6x 19.2x Paycom Software 19.6 1.21 0.39 16.1x 49.5x Paylocity 13.3 0.85 0.13 15.6x n/m SAP 109.4 33.13 6.97 3.3x 15.7x The Sage Group 8.8 2.52 0.55 3.5x 16.0x Trinet Group 4.5 4.80 0.61 0.9x 7.4x Workday 37.1 5.67 0.19 6.5x n/m Median: 5.6x 16.0x TALENT MANAGEMENT TALENT ACQUISITION STAFFING HCM PUBLIC TRADING STATISTICS 3 n/m: multiples less than 0x or greater than 50x Source: PitchBook

HVA’S Q3 2022 HCM QUARTERLY REPORT RECENT NOTABLE TRANSACTIONS DEAL COUNT BY SUB-SECTOR HCM M&A SUMMARY 4 Sources: PitchBook, SIA HR TECH STAFFING Undisclosed AUG 2022 Undisclosed SEP 2022 $2.9B CAD SEP 2022 $3.7B AUG 2022 Undisclosed AUG 2022 Undisclosed JUL 2022 Undisclosed JUL 2022 Undisclosed AUG 2022 Undisclosed AUG 2022 Undisclosed SEP 2022 48 33 36 35 40 31 47 27 31 10 27 30 35 23 23 32 37 40 30 4 2 6 4 9 11 10 12 13 11 11 7 11 14 23 23 20 23 7 8 4 6 8 9 7 11 18 9 10 14 17 18 12 32 19 17 19 2 3 3 2 2 3 6 9 5 3 5 6 12 29 30 25 22 25 0 20 40 60 80 100 120 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 2020 2021 2022 Staffing Core HR Talent Acquisition Talent Management

Sep

Aug

n/m n/m n/m n/m

n/m n/m n/m n/m n/m

n/m n/m n/m n/m

n/m n/m n/m n/m n/m

n/m n/m n/m n/m

n/m n/m

n/m n/m n/m

Aug

n/m

n/m n/m

n/m n/m n/m n/m

n/m

n/m n/m n/m n/m

HVA’S Q3 2022 HCM QUARTERLY REPORT CORE HR HR M&A TRANSACTIONS TALENT MANAGEMENT 5 Source: PitchBook Deal Date Company Name Acquirer Deal Size ($M) Revenue ($M) EBITDA ($M) Revenue Multiple EBITDA Multiple

22 Ento Humanforce

n/m

22 Benefit Administrators West CHS

22 Worksphere Envoy

22 Hr Servizi Horsa

n/m

22 kiwiHR Sympa

n/m Sep 22 PentaSoft Horsa

22 HRSoft Bow River Capital

22 Cognos HR Resourcing Edge

22 Namely PrismHR & Vensure

22 aTurnos Octime

22 Husys People2.0

22 Smart HR PassioHR n/m

Aug 22 Paynas valU Consumer Finance n/m n/m

n/m Aug 22 Revtech consulting BTR n/m n/m

22 VAIRKKO Technologies EMS|MC n/m

n/m n/m Aug 22 Ameego Humi n/m

Aug 22 KinHR WagePoint n/m

Aug 22 OfficeTogether Envoy

n/m

n/m n/m Jul 22 Preferred Payroll CAVU n/m n/m

n/m n/m Jul 22 Air HR KarbonPay n/m

Jul 22 Vivup Omni Partners n/m n/m n/m n/m n/m Jul 22 Lofino JobRad n/m n/m n/m n/m n/m Jul 22 Hrpro SD Worx n/m n/m n/m n/m n/m Deal Date Company Name Acquirer Deal Size ($M) Revenue ($M) EBITDA ($M) Revenue Multiple EBITDA Multiple Sep 22 RTM Consulting Belcan n/m n/m n/m n/m n/m Sep 22 vCOACH Lepaya n/m n/m n/m n/m n/m Sep 22 WellteQ Digital Health Advanced Human Imaging n/m n/m n/m n/m n/m Sep 22 Feedz Totvs $12 n/m n/m n/m n/m Sep 22 LifeWorks Telus $2,240 $812 $217 2.8x 10.3x Sep 22 WiserSkills Neobrain n/m n/m n/m n/m n/m Aug 22 Our Tandem Beqom n/m n/m n/m n/m n/m Aug 22 Frontline Education Roper Technologies $3,725 n/m n/m n/m n/m Aug 22 eMentorConnect Chronus n/m n/m n/m n/m n/m

Aug

Jul

n/m n/m n/m n/m

n/m n/m n/m n/m n/m

n/m n/m n/m n/m

n/m n/m n/m n/m n/m

$22 n/m n/m n/m n/m

n/m n/m n/m n/m n/m

n/m n/m n/m

n/m n/m n/m n/m

HVA’S Q3 2022 HCM QUARTERLY REPORT HR M&A TRANSACTIONS 6 TALENT ACQUISITION TALENT MANAGEMENT (CONT.) Source: PitchBook Deal Date Company Name Acquirer Deal Size ($M) Revenue ($M) EBITDA ($M) Revenue Multiple EBITDA Multiple Sep 22 Jacando Tenhil

Sep 22 Prelude Calendly

Sep 22 Graduateland JobTeaser

Sep 22 Skillate Sense

Sep 22 Emmersion IXL Learning

Aug 22 Headstart Silverback United

Aug 22 pymetrics Harver

Aug 22 TalentReef Mitratech

Aug 22 Entelo Silkroad

Aug 22 Pearl Global Tech Topia

Aug 22 Hire Image Orange Tree

Aug 22 Lever Employ

Jul 22 ProUnity HeadFirst Group n/m n/m n/m n/m n/m Jul 22 Radancy New Mountain Capital n/m n/m

Jul 22 Vero Screening Accurate n/m

Jul 22 SourceBreaker Bullhorn n/m

Jul 22 Global Safety Network Universal Background n/m

Jul 22 CareerEco Vault Firsthand n/m n/m n/m n/m n/m Jul 22 Matchwell Medical Solutions n/m n/m n/m n/m n/m Deal Date Company Name Acquirer Deal Size ($M) Revenue ($M) EBITDA ($M) Revenue Multiple EBITDA Multiple

22 First Healthcare Compliance Panacea

n/m Aug 22 PeopleInsight HireRoad

n/m Aug 22 Todays Class The Riverside Company

22 Micron Systems Litera

n/m

22 SAP Litmos Francisco Partners

22 Key Associates McGuckin

22 viGlobal Aderant Holdings

22 Curricula Huntress Labs

22 Sears Coaching Franco IO Consulting

22 Talivest Go1

22 WorkStride Prepaid Technologies

22 Pragmatic Institute MidOcean Partners

22 PatternShifts AXIOM Learning Solutions

22 ATG Repairify

22 Tiptrack Achmea

Sep

Aug

n/m n/m n/m n/m n/m

n/m n/m

n/m n/m n/m n/m

n/m n/m n/m n/m n/m

n/m

HVA’S Q3 2022 HCM QUARTERLY REPORT STAFFING M&A TRANSACTIONS 7 Sources: PitchBook, SIA STAFFING Deal Date Company Name Acquirer Deal Size ($M) Revenue ($M) EBITDA ($M) Revenue Multiple EBITDA Multiple

22 Seneca Resources Caymus Equity Partners

22 Prime Time Healthcare One Equity Partners

22 Ethika Group All Medical Personnel

22 Lawton Group Longship Group

22 Direct Recruiters Starfish Partners

22 xiBoss Corp. S.i. Systems ULC

22 Prudential Security Titan Security Group

22 Make Corp DISYS

22 Infinity Consulting Solutions Korn Ferry

22 Purcell Staffing Flexible Staffing

22 Cognitive Group Focus Cloud

22 Afimac Global Inc New State Capital Partners

22 Mayday Healthcare Optimo Care Group

22 Hunt & Badge Consulting Hudson Global

22 Denver Devshop The Offr Group

22 PNP Staffing Group Careers in Nonprofits

22 De Forest Search TalentoHCM n/m

n/m n/m

22 People Source Staffing JobSquad Staffing Solutions n/m

Aug 22 Work Simplr Upskls

22 Barton & Associates H.I.G. n/m n/m n/m n/m n/m Jul 22 PrincetonOne Jobs.com n/m n/m

n/m n/m Jul 22 Corestaff Services swipejobs $17 n/m n/m n/m n/m Jul 22 Phaidon International Further Global n/m n/m n/m n/m n/m Jul 22 Four Corners Group Arthur J Gallagher n/m n/m n/m n/m n/m Jul 22 Vincent Benjamin The Intersect Group n/m n/m n/m n/m n/m Jul 22 Harmony Healthcare Addison Group n/m n/m

n/m n/m Jul 22 MYTA Technologies Seq Technology n/m n/m

n/m

Jul 22 Genuent A&M Capital Partners n/m n/m n/m n/m n/m Jul 22 Meleeo GHR Healthcare n/m n/m n/m n/m n/m Jul 22 Metro Systems Tandym Group n/m n/m n/m n/m n/m

HVA’S Q3 2022 HCM QUARTERLY REPORT $662 $760 $1,029 $363 $782 $945 $1,337 $767 $783 $746 $928 $513 $2,152 $3,595 $5,986 $6,222 $4,542 $4,316 $1,548 0 20 40 60 80 100 120 0 1000 2000 3000 4000 5000 6000 7000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 2020 2021 2022 Sum of Transaction Sizes Transaction Count NOTABLE FINANCINGS QUARTERLY FINANCING ACTIVITY $200M SEP 2022 GLOBAL PAYROLL HCM FINANCING SUMMARY 8 RECRUITMENT PLATFORM $80M AUG 2022 COMPENSATION & BENEFITS $150M AUG 2022 EMPLOYEE ENGAGEMENT $90M AUG 2022 Source: PitchBook 50% 55% 47% 51% 51% 39% 39% 43% 42% 42% 11% 6% 10% 7% 7% 2018 2019 2020 2021 2022 YTD Early-Stage Late-Stage PE Growth/Expansion *in thousands

TECH UNICORNS

HVA’S Q3 2022 HCM QUARTERLY REPORT Q3 2022 NEWLY MINTED UNICORN HR TECH UNICORN TRACKER HR

9 Source: PitchBook

Sep

n/m GGV Capiral

n/m GSV

n/m Northzone

n/m Sixth Street Growth

$72 Insight

$90 3L

n/m F Prime

n/m Blackhorn Ventures

n/m

$40 Sequoia

Undisclosed

n/m K1

$15 Lerer Hippeau

n/m Kindred Ventures

$29 Equal Opportunity Ventures

$50 Accel

n/m

$1,570

$10

HVA’S Q3 2022 HCM QUARTERLY REPORT HCM FINANCING ACTIVITY 10 EARLY STAGE VENTURE CAPITAL Sources: PitchBook, HRTECHFeed Deal Date Company Name Broad Category Deal Size ($M) Pre-Money Valuation ($M) Lead/Sole Investors

22 Workstream Talent Acquisition $60

Sep 22 CoRise Talent Management $9

Ventures and Greylock Partners Sep 22 Yonder Core HR $3

and Frontline Ventures

22 Atlas Core HR $200

22 Joonko Talent Acquisition $25

Partners Sep 22 Hone Talent Management $30

Capital Sep 22 Ashby Talent Acquisition $22

Capital Sep 22 Isometric Technologies Talent Management $15

Sep 22 Learnsoft Talent Management $17

Elsewhere Partners Sep 22 BlossomTeam Talent Management $2

Kevin Carter Aug 22 Kula Talent Acquisition $12

Capital and Square Peg Capital Aug 22 oVice Core HR $32 n/m

Aug 22 Caju Beneficios Core HR $25

Investment Management Aug 22 Wreno Talent Acquisition $5

Aug 22 HumanQ Talent Management $2

Aug 22 Headroom Core HR $9

Aug 22 ModernLoop Talent Acquisition $9

Aug 22 Deskbird Core HR $5

FortyOne Group Aug 22 Complete Core HR $4 n/m Accel Aug 22 Incredible Health Talent Acquisition $80

Base10 Partners Aug 22 Motivo Health Talent Management $14 n/m Cox Enterprises Aug 22 IsoTalent Talent Acquisition $5

Crocker Ventures and Ad Ventures Aug 22 Venue Core HR $4 n/m Accel Aug 22 Roleshare Talent Acquisition $1 n/m Plug and Play Tech Center Aug 22 Growthspace Talent Management $25 n/m Zeev Ventures Aug 22 Ben Core HR $16 n/m Atomico Aug 22 Mosey Talent Acquisition $18 $60 Canaan Partners with Gusto Aug 22 The Bacon Talent Acquisition $8 n/m Grayhawk, 2.0 Ventures, and Elevate Aug 22 Nano Core HR $6 n/m Openspac Aug 22 Tartan Core HR $5 n/m InfoEdge Ventures Jul 22 Switchboard Core HR $25 $150 Icon Ventures Jul 22 Kona Talent Management $4 n/m Unusual Ventures Jul 22 Workshop Core HR $5 $20 McCarthy Capital Jul 22 Allwhere Talent Management $10 $30 DESCOvery Jul 22 CAF Talent Acquisition $24 n/m Darryl Green Jul 22 Veremark Talent Acquisition $9 n/m Stage 2 Capital Jul 22 EarlyDay Talent Acquisition $3 n/m Alpaca VC and Struck Capital Jul 22 Inflection Points Talent Acquisition $13 n/m Fifth Down Capital Jul 22 The Garden Talent Management $4 $18 Index Ventures Jul 22 Kadmos Core HR $30 n/m Blossom Capital Jul 22 Yoodli Talent Management $7 $20 Madrona Venture Group and Cercano

HVA’S Q3 2022 HCM QUARTERLY REPORT HCM FINANCING ACTIVITY 11 Sources: PitchBook, HRTECHFeed Deal Date Company Name Broad Category Deal Size ($M) Pre Money Valuation ($M) Lead/Sole Investors Sep 22 Hofy Core HR $15 $315 CNP Sep 22 Sitetracker Core HR $66 n/m Energize Ventures Sep 22 The Muse Talent Acquisition $8 $9 MBM Capital Sep 22 Knoetic Talent Management $36 $220 EQT Ventures Sep 22 Taqtile Talent Management $5 n/m Mesmerise, Downer, and 5G OI Lab Sep 22 MVP Match Talent Acquisition $5 n/m Stage 2 Capital Sep 22 Sonder Talent Management $24 n/m Blackbird Ventures Sep 22 Wazoku Talent Management $8 $65 Calculus Capital and Octopus Ventures Aug 22 HiBob Core HR $150 $2300 General Atlantic Aug 22 Truework Core HR $50 $400 G Squared Aug 22 Ceresa Talent Management $3 n/m TTCER, LiveOak and EduLab Aug 22 Aisera Core HR $90 $550 Thoma Bravo and Goldman Sachs Aug 22 ZayZoon Core HR $13 n/m Carpe Diem Investments and Alpenglow Aug 22 Cybrary Talent Management $25 n/m BuildGroup and Gula Tech Adventures Jul 22 Evabot Talent Management $11 $41 Comcast Ventures Jul 22 15Five Talent Management $52 n/m Quad Partners Jul 22 HireArt Talent Acquisition $26 $100 Three Fish Capital Jul 22 Robin Core HR $30 $300 Tola Capital Jul 22 Preply Talent Management $50 $350 Owl Ventures Jul 22 InternMatch Talent Acquisition $7 n/m Doma Group Jul 22 ID Pal Talent Acquisition $7 n/m Inspire Investments Jul 22 Happeo Talent Management $26 n/m SmartFin, Evli Growth, and Endeit Deal Date Company Name Broad Category Deal Size ($M) Pre Money Valuation ($M) Lead/Sole Investors Sep 22 HRSoft Core HR n/m n/m Bow River Capital Partners Sep 22 Predictive Index Talent Acquisition $30 n/m JM Family Enterprises Aug 22 Strive Talent Management n/m n/m Essex Bay Capital Jul 22 Continuum Talent Acquisition $12 $23 Pelion Ventures PRIVATE EQUITY GROWTH / EXPANSION LATE STAGE VENTURE CAPITAL

HVA’S Q3 2022 HCM QUARTERLY REPORT $9M $11M $16M $29M $30M $36M $38M $42M $44M $54M $67M $117M $139M $150M $187M $281M $297M $- $50M $100M $150M $200M $250M $300M $350M Video Interviewing Rewards and Recognition Pre-Employment Screening Onboarding Assessments Talent Analytics Leadership Development Wellness Employee Engagement Compensation and Benefits Performance Management Sourcing Learning HRIS Hiring Tools Workforce Management Payroll HCM FINANCING ACTIVITY 12 Sources: PitchBook, HRTECHFeed Q3 VENTURE FUNDING SUMMARY PAYROLL DRIVES VC INVESTMENT IN 3RD QUARTER 2022 VC DEALS OVER $100M RETURNED TO PRE 2021 LEVELS 2 2 2 2 2 4 1 2 1 3 1 9 14 18 17 17 13 2 0 2 4 6 8 10 12 14 16 18 20 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 2020 2021 2022

In 2021, $660M was invested in the assessment space, including three companies that each raised over $100M, along with 12 M&A transactions In 2022, we have seen continued investment, albeit at a lower volume and deal size, but still attracting $213M in funding and four M&A deals The space has garnered employer and investor interest as companies look to hire qualified talent more efficiently and develop current talent more effectively. This dual need for pre hire and post hire assessments, has generated demand for comprehensive suites solutions, sparking consolidation and convergence across a diverse set of use cases and assessment types.

Use Cases

Pre hire Culture Fit

Developmental

Technical Skills

Assessment Types

Cognitive Behavioral

Soft Skills Language

Perhaps the most active acquirer in the assessment space, PSI Services backed by Waud Capital has made over thirty acquisitions, rolling up assessment and training companies spanning higher education, certifications, and corporate assessments. Harver (formerly OutMatch), has acquired solutions across assessments, video interviewing, and talent analytics, most recently acquiring behavioral assessment platform Pymetrics to enhance talent decision capabilities across both hiring and development In addition, provider of video interviewing and assessments HireVue has acquired capabilities in gamified cognitive assessments and skills assessments with its acquisition of MindX and Candidate Metrics, respectively

As new assessment solutions emerge and incumbents continue to consolidate, providers are tasked with striking the appropriate balance of a quick, easy to use assessment and one that is research backed and validated. For example, in pre hire assessments, the candidate experience is of high importance to prevent candidate dropout during screening, but a data validated assessment is necessary to make appropriate hiring decisions. There have been several investments in innovative assessment companies that aim to combat candidate dropout and support engagement Notably, six minute behavioral assessment Predictive Index received a $30M investment from JM Family Enterprises, following General Catalyst’s $50M investment in 2019 In addition, mobile friendly cognitive, technical, and language assessment platform TestGorilla raised a $70M Series A round led by Atomico.

Employer’s growing commitment to learning and upskilling has sparked investment in skills focused assessments for development and pre hire purposes. Assessments are instrumental in identifying candidate abilities during the recruitment process and skills gaps in the current workforce Some companies are making strides towards connecting skills gaps with learning initiatives and these solutions are gaining interest from buyers and investors Here at Harbor View Advisors, we were proud to represent Emmersion, provider of language assessment used for pre hire, placement, and ongoing development of language learners, in its sale to online education platform IXL Learning. Another example of this trend is NeoBrain, which Harbor View Advisors

Acquired by

collects employee data to identify skills, assess current capabilities, and map upskilling and reskilling pathways for individuals. The company raised a $22M Series A led by Breega in March of 2022 and six months later acquired skills mapping and mobility platform WiserSkills to expand strategic workforce planning capabilities. Also, HackerRank, which provides technical assessments and a learning platform for software developers, raised a $60M Series D round led by Susquehanna Growth Equity at a $275M valuation

HVA’S Q3 2022 HCM QUARTERLY REPORT SUB-SECTOR SPOTLIGHT: ASSESSMENTS 13

HVA’S Q3 2022 HCM QUARTERLY REPORT HCM EXPERTISE HUMAN CAPITAL MANAGEMENT TEAM Visit us: Harborviewadvisors.comEmail us: vision@hvadvisors.comCall us: 904 285 4278 14 Nick Mignone ASSOCIATE Margaret McCormick VICE PRESIDENT Carolyn Mathis PARTNER ANALYST Bernard Neret Received an Investment from Acquired by Received an Investment from Acquired by Acquired byAcquired by Received an Investment from Acquired byAcquired by Acquired byAcquired by (Non Leader Assessment Division) Acquired by Acquired byAcquired byAcquired by

Zuri

Goodman ANALYST

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