Lattice, a platform that helps with workforce people management — tools to run performance reviews, employee feedback, and praise; tools to set and track goals and other long-term career plans; and analytics to get a bigger picture of how a workforce is working — has really come into its own as a business in the last two years, as our concepts of “office” and “team” have been stretched by the challenges of a global health pandemic. Now, the startup of the same name has closed a big funding round at a big valuation — $175 million, a Series F that values Lattice at $3 billion — underscoring the ground it has gained in the market, and the ambitions it has for the future.
Thrive Capital, Elad Gil, Tiger Global, and Dragoneer led the round, with previous backers Founders Fund, HighSage Ventures, Shasta Ventures, Fuel Capital, Khosla Ventures, and several new angel investors, also participating. The funding, which brings the total raised by Lattice to $330 million, comes just 10 months after the company last raised (a Series E at a $1 billion valuation). Jack Altman, the founder and CEO, told TechCrunch that it was proactively approached this time around on the back of strong growth.
The company today focuses on desk-based, so-called “information” or “knowledge” workers, with its 3,550 businesses are up by more than 1,000 since that last round. Lattice’s customer base is heavy on tech companies that are resident in its own backyard and includes the likes of Slack, Turo, Clio and many more. Front-line, deskless employees are not currently part of Lattice’s remit — they require a significantly different set of tools and, often, priorities from those sitting at computers all day, but Altman didn’t rule out that this would be a segment it would like to tackle ahead.
Lattice’s growth in the market is partly because its tools match today’s work climate. The world of work has changed significantly in the last two years. Thanks to Covid-19, many people who had traditionally gone into offices are now working at home or other smaller, more localized environments. What hasn’t changed, though, is that this workforce still needs to operate as a cohesive team, where people can communicate about what they are achieving, and what they want to do, and managers can get a picture of what they’re doing to reward them or identify ways to work better.
Lattice had been growing at a steady pace for several years before Covid-19 descended on the world, but it was the pandemic that really put a spotlight on how important people management could be when it is effective (and being effective means having tools that people are actually willing to use, since there are so many out there now that feel more like chores than helpful aides).
“We’d built many products and got a lot of traction [before the pandemic] but the world we’re living in today has accelerated things for a lot of reasons,” Altman said in an interview. “The office environment allows for a lot of interpersonal exchanges, connection, and apprenticeship. It’s not that you don’t need software for people management in the office environment but when you don’t have those connections you still need to feel like you work for a bigger purpose. We are staring at a box all day now, and we don’t have a manger who comes by and says great job and makes us feel appreciated. Systems like Lattice give a process for how we connect and interact and make sure that I know that I am cared for by our manager as a professional and a person. Covid-10 created that tailwind.”
Another surprise has been the economy: many presumed in the spring of 2020 that everything would tank, and some things indeed struggled, but the whole economy did not collapse, unemployment stabilized, and some employees even started to realize that they had some bargaining power due to hiring demands. This too led to a bigger drive for better people management tools.
Altman characterized the thinking as: “‘Geez, we’ve got to invest in people more if we want to keep them.’ That became the economic backdrop.”
People management as a wider part of enterprise IT has seen a lot of evolution in the last several years: companies like Workday, which dominate HR software, have created wide toolsets within their bigger platforms to manage areas like performance and compensation; and there are a number of pure-play companies like 15Five that also focus specifically on areas like goals and praise. Lattice both partners with larger platforms and also competes against them. I suspect that the latter will become a more dominant part of those relationships as Lattice continues to add more functionality to its own platform. (In the last several years it has added performance management, and then engagement surveys, and now a host of career development tools.)
“The longer term plan is to keep building and expanding,” Altman said.
The widening of the platform and the functionality within it, serving a fast-growing base of customers, holds a lot of promise for investors.
“We’ve seen a few broad trends come together in recent years — the rise of remote work, the evolution of the role of HR — that have fuelled the HR market,” said investor Elad Gil, in a statement. “Lattice’s approach of creating a broad suite of interconnected offerings has resonated and led to really exciting growth.”
from TechCrunch https://ift.tt/3FIIIiC
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