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The Work Tech Recovery Is Here

Marketing, Discussion, Employee Experience, Newsletter, Work Tech Trends, Work Tech Weekly
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Marketing, Discussion, Employee Experience, Newsletter, Work Tech Trends, Work Tech Weekly


The economic propellerheads have been asking, “is this a recession or not?” for what seems like forever. For those of us in Work Tech, we’ve been in a recession since the beginning of Q3 2022. But now, based on Q1 investment numbers, it appears that the recovery has begun.

Q1 Work Tech investment hit $3.25 billion, a 16.5% increase from Q4 and the first QoQ increase since Q2 2022. There were 105 deals – 65 of which were Series A, seed, or pre-seed deals. There were also 9 $100 millon+ deals, the same number as in all of Q3 and Q4 2022.


Our hot takes:

  • While these numbers are paltry compared to numbers from Q1 2021 through Q2 2022, the Q1 2023 total was 52% than the 2019-20 quarterly average. The same is true for average deal size, deal volume, and pretty much any way you want to slice it.
  • These numbers are in line with other indicators showing an increased interest in Work Tech in the broader market. The nature of work is in the middle of a tectonic shift, and Work Tech is perceived to be a better area for investment than other tech categories.
  • There is a flood of money going into early-stage Work Tech startups. On deal volume, 62% of deals were early stage (Series A or earlier). Pitchbook data (cited by Deloitte) backs this up.

So what do all these numbers mean? A few things:

  • This is a recovery, not a dead-cat bounce. Work Tech growth is on the way back up. This doesn’t mean we’ll be going back to 2021’s days of wine and roses. But Work Tech is definitely trending up from where things were headed in 2019-20.
  • Early-stage is everything right now. Advances in AI and low-/no-code, combined with the continuing complexities of hybrid and remote work will create intense market demand for new solutions.
  • Work Tech is far more than HR Tech. For anyone who didn’t get the memo, Work Tech is spilling over the typical confines of back-office HR software.
  • Many mid-stage Work Tech companies are going to have a problem. Companies that need to go for a B, C, or D round in the next 12 months will face a challenging environment. Down rounds, acquisitions on unfavorable terms, and wind-ups will become all too common.

Enjoy the good news. Stay tuned for more.

What else is going on this week?

New episode: Work Tech Weekly Vlog

Listen in as Bret Starr and Steve Smith discuss how events offer a chance for face-to-face interactions and to foster deeper connections and relationships in a world where virtual communication has become prevalent.

The ability to meet and engage with potential customers, partners, and industry influencers can lead to valuable business opportunities that may not have been possible through virtual interactions alone.

While events may have changed in format and approach, their importance in Work Tech has not diminished. They provide opportunities for professionals to connect, learn, and showcase their expertise, making them a strategic and valuable component of a company’s overall marketing and networking strategy in 2023.

Work Tech events, 2023

Speaking of conferences, they are back in full swing post-2020. If you’re attending or exhibiting at an event this year, you ought to get the most out of it that you can. Wondering what to do? Take a look at our latest e-book, Know Before You Show: The big book of Work Tech events, 2023, for survey results from Work Tech leaders and hot takes from our SMEs. Check it out!

Funding, mergers, and acquisitions

  • Prism raises $26 million in seed, Series A funding. The LA startup offers a lending platform tailored to startup tech companies and employees. (FinSMEs)

  • Iteration X raises $4.7 million in seed funding. The Paris startup allows teams to collaborate and iterate directly on their live products and websites. (FinSMEs)

  • Engin Sciences raises $2.5 million in seed funding. The NYC startup offers recruitment software that enables companies in emerging industries such as cannabis to build workforces. (FinSMEs)

  • Apogee to acquire Argon Business Systems. (FinSMEs)

  • Ciphr acquires Marshalls e-Learning. (Training Industry)

Prem Bhatia is the co-founder of Cooleaf, a platform that helps top companies engage, motivate, and connect their people. Cooleaf’s story, like Prem’s, is unique in that it initially launched as a B2C company before pivoting to B2B SaaS. Prem believes in the power of culture and that connecting people in meaningful ways can drive significant improvements for business, profitability, and growth metrics. He finds mentorship with fellow SaaS founders, his favorite album is by U2, and he’s a minimalist.

Check out Prem’s full story in the latest edition of our Founder15 series.

Industry notes

  • March jobs report points to cooling job market. (Wall Street Journal)

  • Saudi Arabia discloses ties Andreessen Horowitz, dozens of other venture funds. (The Information)

  • Sequoia and other U.S.-backed VCs are funding China’s answer to Open AI. (The Information)

  • How workers at Accenture and Walmart are using virtual reality. (Fast Company)

  • ADP declares $1.25 dividend. (Seeking Alpha)

  • Snappy announces Snappy for Salesforce. (Press Release)

  • BenefitFocus appoints Andrew Frend as President. (Press Release)

  • Cornerstone launches Opportunity Marketplace to redefine workforce agility and talent mobility. (Training Industry)

  • Deadline to enter Brandon Hall Group Spring Awards is Friday, April 14. (Brandon Hall Group)

  • How AI and VR will change stressful work conversations. (CNBC)

Around the shop

Things we’re talking about or find interesting right now.

  • Engaged employees create better customer experiences. (Harvard Business Review)

  • Enterprise tech consultant arrested in connection with the murder of CashApp founder Bob Lee. (The New York Times)

  • Some dude hooked ChatGPT up to a Furby. S**t got crazy. (USA Today)

  • One image shows how far AI has come in one year. (CreativeBloq)

That’s it for this week!


Everybody love everybody,

Steve Smith

Steve Smith

Partner & Chief Marketing Officer

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