Why We Invested in Paradox and How It’s Changing the Future of Talent Acquisition

Our Investment

In the final week of 2021, we closed an investment in Paradox’s Series C financing: a $200MM round led by Stripes, Sapphire Ventures, and Thoma Bravo. Other investors in the round included existing investor Brighton Park Capital, as well as Workday Ventures, Willoughby Capital, Twilio Ventures, Geodesic, Principia Growth, and DLA Piper Venture Fund. We’re thrilled to work with Aaron and the amazing team at Paradox to transform the talent acquisition process through conversational AI.

What Paradox Offers

Paradox is the leading conversational AI platform for talent acquisition (TA). The company creates mobile-first, conversationally driven recruiting experiences across any type of hiring situation. At the heart of Paradox’s solution is its conversational AI assistant, “Olivia”. Olivia is a chatbot that intelligently responds to job questions using NLP, guides candidates to relevant openings, and automates interview scheduling, amongst other capabilities.

The platform’s flexibility makes it ideal for both high-volume hourly and highly skilled professional recruiting. Across both hiring situations, Paradox dramatically accelerates time-to-hire and increases recruiter productivity.

Companies looking for hourly hires (such as McDonald’s and Wendy’s) can entirely replace their talent acquisition stack with Paradox’s end-to-end hiring solution. This solution allows candidates to apply to jobs entirely through a text or chat conversation with Olivia.

For enterprises (such as Nestle and Unilever) looking to hire highly skilled professional candidates, Paradox is the ideal solution to augment recruiters’ work. Paradox keeps candidates engaged and automates time consuming tasks such as scheduling interviews and answering repetitive role-related questions. Through deep integrations with all major HR Tech platforms such as SAP SuccessFactors, Workday, ADP, and UKG, Paradox becomes the system of experience for recruiters, augmenting the existing talent acquisition stack.

Today’s Talent Acquisition Paradigm

Across the U.S., companies are struggling to hire workers. Chipotle CEO Brian Niccol recently bemoaned on the company’s third quarter earnings call “I know we’re missing sales because [we] are [not] fully staffed.” And over at Domino’s, CEO Ritch Allison remarked “look at the number of open job positions across the U.S. … it’s a pretty staggering number.”

Companies are unable to meet their hiring needs because talent acquisition processes remain archaic. No doubt the tight labor market has compounded these problems. But when most recruiters today spend 80% of their time on administrative tasks and only 20% of their time on candidate engagement, why are we surprised that it’s difficult to ramp up hiring when needed?

Companies today are ill-equipped to compete in a modern hiring environment. And those in the market for hourly workers feel this problem most acutely, where labor is hardest to find, and resources are most constrained. For these companies, labor shortages contribute tangibly to reduced operating hours, higher overtime, and lost revenue opportunities. To make matters worse, hourly hiring processes typically lack dedicated talent acquisition teams; recruitment is often run by hiring managers who also juggle their day-to-day jobs. Handling these two responsibilities while understaffed becomes a Sisyphean task.

Neither are talent acquisition teams for professional salaried workers free from today’s hiring woes. As teams are asked to drive better hiring outcomes in a tougher labor market, they are constrained by the drudgery of admin work that today’s recruiting processes entail. Though TA teams are hired to engage with high-potential candidates, they often end up spending most of their time on tasks such as scheduling.

At BCV, we’ve seen numerous startups emerge to enable companies to hire better candidates faster. Talent marketplaces, workforce management platforms, vertical-specific ATS platforms, and dedicated recruitment websites have certainly helped augment hiring practices. Yet many fail to provide the candidate experiences required to win in a labor market that is structurally more competitive than it has ever been.

Dedicated career sites for example, have emerged over the past few years to help companies deliver modern candidate experiences by personalizing candidate messaging and quickly iterating on job updates. While a step in the right direction, these solutions only partly address the core challenges of modern talent acquisition.

Why We’re Excited About the Future of Talent Acquisition With Paradox

That’s why when we heard about Paradox’s solution and met Aaron Matos and his team, it was clear that they had built something truly special. Paradox delivered by far the best customer outcomes that we’ve seen in the space. Talent acquisition teams saw dramatic reductions in time-to-hire (often from weeks to days), up to 60% decreases in costs-to-hire on a per applicant basis, 90% interview show rates, and up to 99% candidate satisfaction rates.

And more impressively, Paradox delivers on phenomenal hiring outcomes across both hourly and professional TA use cases. For hourly hiring, Paradox’s Hire, an end-to-end talent acquisition solution with conversational AI at its core, replaces the entire talent acquisition stack. Companies using Paradox can vastly simplify their recruitment process and allow candidates to apply entirely through text conversations. With Hire, Paradox helps companies like McDonald’s reduce time-to-hire dramatically.

For professional talent acquisition use cases, Olivia is both a 24/7 white glove concierge service delivering personalized candidate experiences, as well as a personal assistant to talent acquisition teams. Flexible beyond its candidate-facing roles, Olivia automates route administration for recruiters. By relieving the burden of tasks such as scheduling and reminders, recruiters can focus on more strategic talent acquisition work.

An Experienced Team With a Compelling Long-Term Vision

When we met Founder and CEO of Paradox, Aaron Matos, we were immediately impressed by his vision for software to become “invisible” — a future where recruiters can be “untethered from their desktops” and free to actively engage with candidates. Aaron not only brings with him over 20 years of HR and software experience, but also the experience of a remarkable management team that he’s assembled over past several years. BCV had the chance to meet Ross Grainger, John Dalzell, Adam Godson, Marc Chesley, Stephanie King, and David Pluto and came off impressed by the team’s shared vision and highly relevant backgrounds in HR software.

With such seasoned leadership, we are confident that the team will continue to bring Paradox’s highly flexible solution to its massive, horizontal market. Paradox has just scratched the surface of its TAM and is well positioned to win.

Paradox’s solution addresses core pain points across a broad swathe of companies: (i) those needing either hourly or professional hiring solutions, (ii) those requiring either candidate or recruiter-facing solutions, (iii) those needing to communicate across all major messaging platforms, (iv) and those that have hiring needs across numerous geographies (Nestle alone uses Olivia to engage with candidates across 47 different countries in 18 different languages).

No doubt, labor markets are cyclical. But the fundamental problem is a lack of adequate tools to drive effective recruiting processes. When barely 1% of the Fortune 500 communicate to candidates their application status, why are we surprised that no-show rates are as high as 50%? Many companies are recognizing these problems and are now turning to Paradox. Marquee customers such as Unilever, Nestle, McDonald’s, CVS Health, and General Motors already use Paradox today. With job openings at near historic highs of 10.5 million, Paradox has an unprecedented opportunity to build a global enterprise.

Victor is an investor at Blue Cloud Ventures. Previously, he worked at BNP Paribas in New York and served as a Lieutenant in the Singapore Armed Forces. His previous investing experience includes private equity at Compass Group and structured credit at Ellington. In his spare time, Victor enjoys writing, mixed martial arts, scuba diving, and visiting art museums. Victor studied Finance and Art History at Washington University in St. Louis.

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