Sometimes a competitor being acquired is the best thing for a startup.
Back in January, popular ATS platform iCIMS bought TextRecruit, a text messaging and live chat communications platform for employers that launched in 2014. “This couldn’t be a better fit,” said Erik Kostelnik, TextRecruit’s co-founder and CEO said at the time. “TextRecruit and iCIMS share the same vision for transforming the recruiting technology market.”
At the time, I speculated the move was brilliant because it put iCIMS in control of a feature that every candidate management tool would have to offer. Text messaging is the most popular means of communication by far right now, and it’s the most effective. Even if other platforms allowed TextRecruit into its pool of apps, they would never be comfortable with iCIMS having access to so much competitive data.
“In a doomsday scenario, iCIMS shuts everyone down and becomes the only place where employers can leverage TextRecruit’s technology,” I wrote at the time. “Doubtful that would happen — at least overnight — but it could.”
Daniel Finnigan, Jobvite’s CEO and president, and one of the smartest people in our space, likely saw the dangers of a competitor like iCIMS owning text recruiting as well. Enter Indianapolis-based Canvas, a messaging platform on par with TextRecruit. Announced July 17, Jobvite Text gives customers a solution to message with candidates, powered by Canvas.
I first wrote about Canvas in July 2017, after it had just received $1.7 million in seed capital. Investors included Tom Linebarger, CEO of Cummins, Jeff Perkins, former VP of HR at SpaceX, and Scott Day, Open Table SVP of people and culture.
“This powerful new technology offers customers an unparalleled advantage in the war for talent by allowing recruiters to easily start conversations with job candidates where they spend most of their time — on their mobile device,” Jobvite said in a release. “The recruiting landscape is rapidly shifting and requires a modern, multi-channel approach to candidate engagement in order to stay top of mind. The speed at which the world moves today requires innovative tools that can keep pace with jobseekers’ growing expectations for instant, personalized interactions.”
Studies going back over a decade show text messages enjoy an open rate of over 95 percent, and that most of those are read within 15 minutes of receipt. Opt-in mails, in contrast, typically see a 20 percent read rate. For younger candidates, email performs worse, so it’s no shock the messaging is so hot in recruiting.
“As proven by this acquisition, there is a significant demand for using text messaging to recruit today’s talent generation,” said Aman Brar, Canvas founder and CEO after the TextRecruit deal. Though Canvas integrates its technology with many solutions, just like TextRecruit, I suspect this offering puts Jobvite in the catbird seat to acquiring the messaging startup down the road. Having known Finnigan for over 10 years and recently getting to know Brar, who also calls Indy home, it would be an intriguing combination.
Acquiring Canvas would put Jobvite in a similarly advantageous position that iCIMS currently enjoys with TextRecruit. It would also put additional heat on the competition, who need to offer text messaging solutions to stay relevant. For some, that means building something in house, where they may or may not currently have the expertise.
For others, it means looking for buying opportunities. It’s no accident then that Juju founder Euan Hayward recently dumped a small business ATS in favor of a text messaging platform called Emissary. Could be a quick flip for big money. Don’t be surprised to see more text recruiting startups to enter the fray. Whereas many people are still trying to wrap their heads around chatbots, AI, and automation, texting is something everyone knows.