Is Work Tech Investment Right Now “Hotdog” or “Not Hotdog”?

Do you remember the episode of Silicon Valley when one character invented the “SeeFood” app, but all it could identify was whether the image was “hotdog” or “not hotdog”? That’s where we are in the tech market right now. Is the current Work Tech investment boom all AI hotdog? And do the non-AI forward “not hotdogs” need to worry?

Well, no, and yes. If you look at Work Tech investment after a blockbuster start to Q3, AI investment is 40% of the investment total. Or, put another way:

Even with more non-AI investment than AI investment in Work Tech, there’s still plenty of hotdog … and lots to worry about. The AI gold rush certainly obscures a wider cash crunch for startups. Also, struggling startups are looking for bailouts from Big Tech, and startup down rounds hit a decade high. Even once high-flying software firms are being forced to confront sluggish growth. The signature volatility that is the signature aspect of the 2020s continues unabated in August as everyone wonders whether the U.S. economy is headed toward a hard landing or a soft one, Way may not be in the darkest part of the forest, but we’re not in the clear just yet.

What else is going on this week?

Funding and Acquisitions

• CloudPay raises $120 million. The Raleigh, NC-based company is an independent provider of global payroll and payment solutions. (FinSMEs)
• The Standard agrees to buy Allstate’s employee voluntary benefits business for $2 billion in cash. (Benefits PRO)
• Payoneer buying global payroll startup Payoneer Workforce Management (Formerly Skuad) for $61 million. (TechCrunch)
• SD Worx buys Italian HR and Payroll giant F2A. (UNLEASH)
• Ema secures $36 million Series A. The San Francisco-based generative AI company is creating the universal employee of the future. (VentureBeat)
• ArborXR raises $12 million. The Norman, Oklahoma, startup offers an enterprise-grade extended reality (XR) mobile device management, content management, and content distribution solution for enterprise companies and solutions providers. (FinSMEs)
• Tezi AI raises $9 million seed round. The Menlo Park, California, startup and its main product, Max, is an autonomous AI system trained by experienced hiring managers and recruiters to manage the complete recruiting cycle, from sourcing candidates to scheduling interviews. (FinSMEs)
• Bandana raises $8.5 million seed round. The NYC startup wants to help people at the lower end of the wage scale find better jobs with higher wages and good benefits, all while being closer to home to reduce commuting time. (TechCrunch)
• Paytner raises $8.2 million Series C. The Tokyo startup provides payment services that help freelancers streamline their businesses. (CB Insights)
• When raises $4.6 million seed round. The Chicago startup offers an AI-powered employee offboarding solution. (FinSMEs)
• Your Money Line raises $4.5 million Series A. The Indianapolis startup offers a platform that combines AI-powered tools with live certified financial coaches to provide personal finance guidance and education to employees. (CB Insights)
• ImpactPool raises $3.9 million. The Stockholm-based startup offers an AI-enabled career platform. (Silicon Canals)
• Infinyte Club raises $3.6 million seed round. The Indian startup offers a platform for individuals to gain liquidity for their employee stock ownership plans (ESOPs) and invest in curated high-growth assets. (CB Insights)
• Vetwork raises $3.6 million. The Sao Paulo, Brazil, company offers cloud-based management systems for veterinary clinics and pet shops, including tools for administrative tasks, real-time data access, inventory management, and integrated fiscal compliance. (CB Insights)
• Veikul secures $3 million in debt funding. The Mexican startup provides shared vehicles to enable individuals to earn income without the need for personal vehicle investment. (CB Insights)
• Bardeen raises $3 million. The San Francisco startup is developing AI agents capable of automating repetitive knowledge work using a natural language interface. (FinSMEs)
• Voiceline raises $2.6 millon seed round. The Munich, Germany, startup offers a smart voice messaging platform for remote and hybrid teams. (FinSMEs)
• Cosine raises $2.5 million. The London/San Francisco startup is developing a human-like, autonomous AI software developer. (FinSMEs)
• Skillfully raises $2.5 million seed round. The San Francisco startup specializes in simulation-driven hiring solutions. (FinSMEs)
• Algo Interview raises $2.18 million angel investment. The Milan, Italy, startup evaluates job candidates' hard and soft skills. (CB Insights)
• Digity raises $1.54 million seed round. The German startup is developing of exoskeletons for the hand to improve productivity and prevent injuries in the workplace. (CB Insights)
• KatagrMa raises $1.15 million debt round. The Tokyo startup supports the management and development of staff at various childcare-related facilities, including personnel evaluation, information sharing, and paperless operations. (CB Insights)
• JUKKI raises $1 million Series A. The Tokyo startup offers insights into companies' salary structures, compensation systems, and employee benefits based on data collected from employees and former employees. (CB Insights)
• M-Files announces PE recapitalization. The Plano, Texas, startup offers a knowledge work automation platform that leverages generative artificial intelligence (GenAI) and automation to boost the performance of knowledge workers. Deal terms were not disclosed. (FinSMEs) 
• ExecThread, Inc., raises growth funding. The NYC-based company that aggregates executive-level career opportunities and board roles did not disclose deal terms. (FinSMEs)
• ECI Software Solutions acquires ProfitKey International LLC. The Dallas cloud-based business management software and services announced the completion of the Salem, NH-based ERP platform for discrete manufacturers. Deal terms were not disclosed. (FinSMEs)
• Questco gets PE investment. The Spring, Texas, PEO did not disclose deal terms. (CB Insights)
• MPAY acquires Southland Data Processing. The Cornelius, NC-based provider of payroll and human capital management solutions acquired Southland Data Processing, a company delivering comprehensive payroll solutions. (FinSMEs)
• ZipRecruiter acquires Breakroom . The Santa Monica, California-based online employment marketplace acquired the UK-based employer review platform focused on frontline industries such as retail and hospitality. Deal terms were not disclosed. (FinSMEs)
• Nayya raises funding from ADP Ventures. The NYC startup that offers an online employee benefits platform supporting mental, physical, and financial needs did not disclose deal terms. (CB Insights)
• CuraLinc Healthcare gets PE investment. The Chicago company offers a range of services, including employee assistance programs, student assistance programs, and wellness programs. Deal terms were not disclosed. (FinSMEs)
• FlexiBees raises seed round. The Indian startup that offers flexible remote work services and startup talent acquisition did not disclose deal terms. (CB Insights)
• Weavings raises seed round. The Indian startup that offers contract staffing and HR outsourcing did not disclose deal terms. (CB Insights) 
• HiTalent raises seed round. The Tokyo startup operates a talent-matching platform that connects highly skilled professionals with employers. Deal terms were not disclosed. (CB Insights), 
• Andgo Systems gets loan. The Saskatoon, Saskatchewan, company specializes in intelligent automation solutions for shift filling and absence management within the healthcare and manufacturing sectors. Terms were not disclosed. (CB Insights)
• Student loan benefit provide Summer acquires Vault. (UNLEASH)
• Golub Capital books losses for Pluralsight. (Pitchbook)

Micropodcast Ep. 62: Start With The Story With Jason Seiden

Most startups start with the product. It’s true that you want people to BUY your product, but they first must BUY INTO the story. Matt Tatum talks about this with Jason Seiden , industry thought leader and co-founder of Comfort Communications Company . WATCH NOW

Arist Launches New AI Course Creation Tool

We don't always get excited about product announcements. However, Arist 's new Creator tool definitely got our attention. I had the opportunity to see it in action last week before its official launch. It's pretty revolutionary from an instructional design perspective, as it does in minutes what would ordinarily take weeks and months. Congratulations to founders Michael Ioffe , Ryan Laverty , Maxine Anderson , and the rest of the Arist team on the achievement!

Enter Now: Top 25 Work Tech Vendor Awards

The clock is ticking! #WorkTech vendors who are looking to bask in the glory of becoming one of Inspiring Workplaces’ Top 25 Work Vendors (in association with The Starr Conspiracy) should enter by September 12. Winners will be announced in Las Vegas at #HRTech! Find out more!

Industry Notes 

• Remote workers are 27 percent more likely to look forward to work. (Ars Technica)
• CFPB proposed rule on Earned Wage Access marks a maturing industry. (Grit Daily)
• Jason Lauritsen: Let’s talk about burnout. (Buzzsprout) 
• Prepare for your next raise to be smaller than you hoped it would be. (Wall Street Journal)
• A tight labor market delivered widespread rewards, but that might be changing. (Wall Street Journal)
• ADP declares $1.40 dividend. (Seeking Alpha)
• Earnings: Adecco Q2 is down. Dayforce posts Q2 loss.  Docebo Q2 beats expectations.  Insperity beats Q2 estimates. Kelly Services posts strong Q2. Monday.com posts solid Q2 numbers.  Paycom lifts FY guidance after Q2 beats. Paylocity beats Q4 and FY24  estimates. Recruit Holdings post profit increase.  UpWork Q2 sees highest-ever net income. 
• Beamery and TalentNeuron announce a strategic partnership to bring AI and labor market intelligence together. (Press Release)
• Only half of Gen Z understands basic insurance terms. (Benefits PRO)
• Demand for employer-provided financial wellness programs increases. (Benefits PRO)
• CIGNA aims to manage the GLP-1 spending panic. (Benefits PRO)
• Senate Appropriations Committee adds ERISA preemption section to spending bill. (Benefits PRO)
• Pluralsight launches AI assistant to personalize the learning experience. (Training Industry)
• TPA and HSA provider breach may have affected 4.3 million people. (Benefits PRO)
• Layoffs: Axios (50 employees/10 percent of workforce), Techstars (ND/17%).
• The recruitment process is more digital than ever. (Gallup)
• Salary ranges now required in Massachusetts. (CBS News)
• Millennial and Gen Z employees communicate differently. Here’s how. (Fast Company)
• Microsoft: AI might not be saving you that much time after all. (Microsoft h/t Charter)
• Upwork : 77% of employees say AI creates more work. (UNLEASH)

Around The Shop

Stuff we’re finding interesting right now at The Starr Conspiracy.

• Goodbye, Knowledge Work. Hello, Wisdom Work. (Harvard Business Review)
• Future B2B Customer Experiences: It’s Human vs. AI. (Marketing Profs)
• Constellation Research, Inc. : Enterprise software vendors are shifting the narrative to “AI is really just software.” (Blog)
• Your Gen Z employees will ask for mental health days. How you respond matters. (Fast Company)

That’s it for this week!

Everybody love everybody,

Steve

P.S. — Are you a #WorkTech or #EnterpriseSoftware company with more than $10 million in revenue or funding that wants to accelerate your growth? Book a meeting with us, and let’s figure out how we can improve your go-to-market strategy and execution.

P.P.S. — Was this newsletter forwarded to you? Subscribe now via email or LinkedIn.

About The Starr Conspiracy

The Starr Conspiracy is an Experience Agency for enterprise technology companies that are shaping the way people work. Our passion is creating defining moments to transform your business across the Customer Experience spectrum — Brand, Marketing, Sales, Product, and Customer Success.