European software giant SAP SE said late Friday it’s planning to buy the San Francisco-based human resources startup SmartRecruiters Inc. for an undisclosed fee, with the deal expected to close by the end of the fourth quarter.
SmartRecruiters sells software that helps to automate high-volume recruiting, and it primarily operates in the U.S., which happens to be SAP’s most important market, accounting for more than 30% of its revenue. Its platform features artificial intelligence-powered applicant tracking tools, recruitment analytics and user-friendly workflows that are designed to optimize hiring processes and reduce time-to-hire.
Once the acquisition is completed, SAP plans to integrate SmartRecruiters’ technology into the SAP SuccessFactors platform, providing customers with enhanced hiring and workforce planning capabilities.
SAP SuccessFactors is a cloud-based platform for human capital management, offering tools for hiring, optimizing workforce management, managing employee performance, enhancing employee experiences and payroll.
According to SAP, the acquisition will enable SuccessFactors to engage in faster, data-driven hiring and offer more streamlined candidate experiences, within a single system for sourcing, interviewing, onboarding and workforce planning.
In the meantime, SmartRecruiters’ software will continue to remain available as a standalone offering. It boasts more than 4,000 enterprise customers, including Amazon.com Inc., Visa Inc. and McDonald’s Corp. It previously disclosed a $110 million Series E funding round in 2021, bringing its valuation to $1.5 billion.
In a press conference announcing the acquisition, SmartRecruiters Chief Executive Rebecca Carr said the deal will allow customers of both companies to “take advantage of the moment”, stressing that AI offers “very exciting” potential in the area of talent acquisition.
Aptitude Research analyst Madeline Laurano told HR Executive that the human resources software market is “primed for consolidation” and that platforms like SmartRecruiters, which offers agentic AI capabilities on top of candidate tracking tools, are tempting acquisition targets.
She added that SAP is getting its hands on a platform that’s well positioned to support “the next generation of hiring.”
Although SAP didn’t disclose the value of the deal, it’s likely to be one of the biggest acquisitions made by the company since CEO Christian Klein took the helm in 2019. Klein has generally made much smaller acquisitions than his predecessor Bill McDermott, buying startups such as the U.S. firm WalkMe Ltd. for $1.5 billion, as well as the German startup Signavio GmbH.
Those deals were designed to help migrate SAP’s customers from legacy software installed on servers to its cloud-based offerings.
Photo: SAP
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