Investment Notes: Hatch

Late last year, Investible participated in Hatch’s A$7 million Seed round alongside Rampersand, Aura Ventures, Jelix Ventures, Alberts Impact Ventures, Common Sense Ventures and various high-profile angel investors including Ahmed Fahour. This investment was made through our cross-sector Early Stage Fund 2.

Today, Gen Z and Millennials comprise 45% of the global workforce, and this number is expected to reach 55% by 2030. Over the last decade, young people’s expectations of work have shifted, as they’re seeking jobs with strong  alignment to their values, their underlying skills (vs. learned abilities typically listed on CVs) along with their motivations, interests and  passions.

Consequently, they are moving away from traditional job boards, where there has been limited innovation over the past 20 years.

On the other side of the table, employers are increasingly looking for Gen Z and Millennial hires to bolster their workforce as a key part of their talent strategy (representing on avg. ~60% of employers’ job openings). Hiring managers are also tired of filtering through a high volume of CVs and screening candidates who have irrelevant experience and limited understanding of the role, leading to low ROI from job postings.

To address these issues, Hatch has developed an innovative employment marketplace using AI to match reputable organisations with early to mid-career professionals (0-7 years of experience). The AI smart matching technology ingests and analyses candidate and employer data to provide better match recommendations (i.e. improving employee fit and retention).

Second-time founders with success scaling and exiting reputable companies

Hatch is founded by Adam Jacobs and Chaz Heitner, who are both successful second-time entrepreneurs, bounded by a 10+ year friendship.

Adam (CEO) was the MD and Co-founder of The Iconic, who built a retail marketplace of over 2.2m active customers and 1.5k fashion brands. Adam also previously worked as a management consultant at BCG and has a background in philosophy.

Chaz (CFO/COO) was the Co-founder of Zip Co (IPO in 2015), a BNPL platform comprising 75k merchants, 6m customers with $8b+ in annual transaction volume. Chaz also founded and exited a media company and started his career as an investment banker at Macquarie Group.

While running those businesses, they experienced first-hand the frustrations and poor results of hiring from incumbent job boards (e.g.Seek, Indeed, LinkedIn, etc.) due to the ‘spray and pray’ approach adopted by candidates when submitting job applications. Inspired by their long-standing passion for helping early career professionals, they decided to build Hatch to address the current shortages of the employment marketplace industry.

Strong positive feedback from blue-chip organisations and candidates

Since monetising its employer subscription plans in August2023, Hatch has signed numerous customers, including key blue-chip accounts such as Qantas, News Corp, Domain, McDonalds and Nine. Their pipeline is also promising, with over 60 organisations in the discovery / onboarding phase.

Additionally, our team was impressed with the positive sentiment conveyed by Hatch’s customers during our due diligence process.Particularly, these organisations expressed that Hatch:

1. Attracts higher quality candidates – candidates are generally more passionate about the roles they applied for and have higher levels of competency (a function of Hatch’s AI-matching algorithm)
2. Significantly reduces cost per hire – ~30-50% cheaper than traditional job boards with flex-up or down options depending on the number of job slots required
3. Reduces time per hire – employers generally save 5-10 hours per role or shave a week off the hiring process (e.g. skipping the phone screening stage as they have the ability to assess candidate motivations via video recordings and questionnaires)
4. Enables employer brand building – Hatch enables organisations to showcase their mission, culture, workplace and people through content posted by hiring team members (candidates can follow and interact with organisations on the platform to learn more about them)

Similarly, candidates have praised Hatch’s superior user experience, noting the ability to access a high volume of quality jobs from reputable employers (curated based on a candidate’s profile and interests) and ability to better portray their skills and personality.

Defensible product with a proprietary AI-matching algorithm

The Hatch platform is powered by an AI machine learning algorithm (developed over 4 years by Hatch’s data science and engineering team, including Dr. Sandra Matz a world leading computational and social scientist) which learns from candidate and employer outcomes and feedback to improve matching quality (similar to dating app algorithms).

So far 2b+ recommendations have been made with an average matching score of 88%, and ~75% of successfully filled roles to date on the platform have been Hatch recommendations.

Hatch also captures candidate profile data, connections and employer feedback loops (improving the algorithms) which traditional job boards don’t have access to. Specifically, Hatch hosts the application process within the platform vs. traditional job boards which primarily function as an advertising platform (i.e. no visibility into which candidates proceed to interview stages).

As the two-sided marketplace scales, the AI-matchingalgorithm will only continue to improve matches, recommendations and insightsthrough network effects.

We are stoked to be partnering with Adam and Chaz, and we look forward to supporting them in their next stage of growth as they scale Hatch across Australia and enter new markets overseas.