/HR-tech startup Lattice triples valuation to $3 billion in new funding

HR-tech startup Lattice triples valuation to $3 billion in new funding

  • Lattice has raised $175 million at a $3 billion valuation, Insider has learned.
  • The funding comes less than a year after a round that valued the startup at $1 billion.
  • The deal highlights investor fervor for technology that helps employers retain their workforces.

To fight the “Great Resignation,” managers need strategies to help retain employees. Enter Lattice.

The startup, which makes software for companies to track and reward employee performance, has experienced a surge in demand as businesses grapple with a changing workplace. And investors are taking notice.

Lattice is now valued at $3 billion after a new investment, Insider has learned. The company raised $175 million in the deal, which highlights investor fervor for technology that helps employers recruit, hire, and retain their workforces.

Thrive Capital, Tiger Global, and Elad Gil coled the financing, with participation from existing backers including Dragoneer, Founders Fund, HighSage Ventures, Shasta Ventures, Fuel Capital, and Khosla Capital. The funding comes less than a year after a Series E round valued the company at a $1 billion in March.

Lattice, whose clients include


Slack

, Asana, and Samsara, was growing before the pandemic, but the shift to remote work threw its business into hyperdrive, Jack Altman, its cofounder and CEO, said in an interview.

In the pandemic, managers have lost their ability to casually check in with their direct reports in meetings or in the halls. Lattice’s software helps them give and get feedback more frequently, through reviews, surveys, and goal setting.

“Once companies go remote, you need some system to capture these things more often,” Altman said.

Investors predict the return to the office likely won’t happen this year, so employers need to invest in “a new back end” to manage their employees, wherever they are, said Maren Bannon, a founding partner at January Ventures who’s not invested in Lattice but has backed future-of-work companies such as OfficeTogether, Gable, and Ethena.

The trend of people quitting their jobs makes the need all the more urgent.

“People are now free to move about the globe, and if employers want to keep their people, they’re going to have to break their old ways of attempting to do so,” Katelin Holloway, a founding partner at the venture firm Seven Seven Six and a strategic advisor at Lattice, said.

jack altman lattice ceo cofounder 1

The Lattice team in 2020. Since then, the company has doubled its team to 470 employees.

Lattice


Built to last

The new importance of people strategy has led to major investment in tech startups building for HR. Last year, investors plugged $12.3 billion into the space globally, a 259% jump over 2020, according to PitchBook data.

Lattice didn’t need to raise more funding when it did, but the cash infusion gave the company the ability to “pursue our goals a little more aggressively,” Altman said. After it laid off about 10 employees at the start of the pandemic, the company tripled in size to 485 employees in 2021, and it plans to double again this year across teams and cities.

The new investment brings Lattice’s total funding to over $330 million and will be used to fund hiring and product development. The company recently expanded its offerings from performance reviews to goal-setting and compensation tools.

Gil, a longtime investor in Lattice, predicted the company would someday own the HR tech stack. It will keep building new products but may also consider acquiring other companies, he said. The explosion of new tools for managing the workplace suggests some consolidation may happen, with small vendors getting gobbled up by bigger ones.

“I think Lattice has a really good shot of being one of the main consolidators of the market,” Gil said.

The latest funding was a bit unusual because three investors coled, which typically means they write similar checks for similar stakes. The structure came out of “an enormous amount of enthusiasm to fund the company,” Gil said.

The megaround may position Lattice for a public debut after a banner year for tech initial public offerings. But when asked if the company was entertaining the idea of going public this year, Altman declined to comment.

“We’re trying to build a company that can last,” Altman said.

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