Andela, which helps businesses recruit software developers working remotely in regions such as Latin America, Eastern Europe and Africa, has raised a $200 million Series E funding round at a $1.5 billion valuation. The round was led by SoftBank Vision Fund 2, a $30 billion investment fund run by Japan’s SoftBank Group.
The financing, which also included new participant Whale Rock and existing backers Generation Investment Management, the Chan Zuckerberg Initiative and Spark Capital, propels Andela to unicorn status and underlines growing investor interest in tech that can help CIOs and other executives solve one of their biggest headaches: finding enough talent to support their ambitious digital strategies.
Jeremy Johnson, cofounder and CEO of Andela, noted that the timing of the funding round also coincides with a seachange in the way that companies are thinking about work. “At the beginning of 2021 people internalized that we were not going back to the office,” he said. “Remote work is going to be necessary from a talent standpoint.”
Launched in Nigeria in 2014 and now headquartered in New York, Andela identifies potential recruits online and puts them through vetting procedures that include language proficiency and coding tests. The businesses that use it to find recruits aren’t just tech companies: Andela’s client roster includes household names in plenty of other industries, including Goldman Sachs, ViacomCBS and KraftHeinz.
The company, which has raised $381 million to date and was last valued at $700 million in 2019, uses AI to help match engineers with recruiters. Employers pay it for successful placements and it also offers things such as advice on local employment regulations. It competes with broad-based remote work sites such as Upwork, as well as with ones that focus on tech workers, such as Semicolon and Decagon.
CIOs and other tech leaders are now more willing to look beyond traditional recruitment hubs such as Silicon Valley, India and China—and are keen to use these services to help them do so. That’s one of the things that attracted SoftBank to Andela. “Hiring remote technical talent is one of the top challenges that companies face today,” said Lydia Jett, a partner at SoftBank Investment Advisers, in a press release announcing the deal.
To many CIOs, it’s the top challenge. According to IT industry group CompTIA, the unemployment rate for tech occupations in the U.S. was a mere 1.5% in August and there were over 320,000 unfilled IT job openings.
“Employer hiring activity for software developers during Q3 increased 35% year-over-year, further confirming the white hot market for tech talent,” said Tim Herbert, executive vice president for research and market intelligence at CompTIA, in emailed comments to Forbes. “It serves as another wakeup call for many employers to reassess their recruiting and retention practices.”
Andela’s financial backers are betting that it can provide remote workers in distant locations to help fill some of these positions and ones in other markets too. The company says it has already placed thousands of engineers in roles and has built up an online community of over 100,000 developers who have pursued courses through its platform. In addition to training, it offers online mentoring and other services.
Its rise hasn’t been entirely smooth. Last year, Andela laid off some staff and several of its top executives took pay cuts as the business reacted to what it thought would be a pandemic-induced lull in tech recruitment. But the market quickly bounced back as companies doubled down on digital investments to help them weather the economic storm.
Andela plans to use some of the money it’s just raised to expand its geographic reach (it currently counts engineers in over 80 countries) and to grow its 300-person workforce. It will also invest more in its technology infrastructure and look for acquisition targets.
Johnson’s convinced there’s an opportunity to completely reinvent the traditional model of recruiting and was looking for more investors who share his view. “SoftBank is comfortable taking big swings,” he said. “And we believe this is an inflection point in global hiring.”