Preppio: Investing in Employee Onboarding
Learn about the investment thesis behind TVG’s investment in Preppio, the company future-proofing the employee onboarding process
How do you onboard an employee that doesn’t work from the office? Questions like these are what talent professionals are used to dealing with, but have become even more important since the pandemic created this ‘new normal’. The employee onboarding experience impacts the longevity of the employer-employee relationship
The TVG Approach
The TVG team likes to live by the motto of ‘investing in what we know best,’ and has been building a large portfolio of companies that impact different stages of the talent acquisition funnel. TVG’s large family of companies includes Nova and the Talent Inc. addressing the ‘sourcing’ category, Wintrgarden and Talent Match focused on ‘engaging’ great talent, Talent Data Labs excelling at ‘selecting’ the right talent, and now Preppio, impacting the ‘hiring’ process by offering a program based on the 6c’s model of onboarding.
There are many reasons forward-thinking companies invest in new talent acquisition technology, but the main goal is to be able to bring overall performance to the next level by filling talent gaps with the best people and retaining them for the long run. Working closely with hundreds of clients and HR directors, from startup companies to enterprise-level organizations, TVG has learned that many of them struggle with onboarding.
The onset of the global pandemic made onboarding even more difficult, but also more important. While the world is still waiting to see how work environments will look in the future, it is certain that, like hybrid work, remote onboarding will remain a necessity. This is a great case for companies like Preppio who are developing future-forward, flexible employee onboarding software that is a game-changer for hiring and retaining new talent. When the TVG team met Amin and Reza earlier this year, we knew we found a new family member to slot into the ‘hiring’ niche of our portfolio.
The Problem Space
When onboarding goes wrong, it takes employees longer to get to full productivity and efficiency, wasting the company’s time and frustrating the new hire. In the worst-case scenario, an employee will simply quit which translates into a financial loss of between $2 thousand and $20 thousand. How widespread is bad onboarding? A poll of U.S. workers disclosed that only 12% of employees would strongly agree that their organization does a “very good” job of onboarding new employees while 88% rate their onboarding as ‘less than ideal’.
If the bad statistics weren’t convincing enough, another report demonstrated that 58% of employees were more likely to stay with an organization for 3-years after a well-structured onboarding program. Unfortunately, few companies go beyond a standard checklist, handbook, and orientation exercise.
Meet Preppio
Preppio is an AI platform designed to empower the HR and employee experience teams to give new hires a world-class onboarding experience. Preppio is easy to integrate into a company’s existing HR software and is extremely intuitive to operate and use right away. The platform coordinates onboarding for all stakeholders and sends helpful content at just the right time using the web app, chatbot, and SMS.
Per hire, Preppio saves company managers from 2 to 10 hours of time in the onboarding process. Preppio’s customer feedback says that the platform is stopping a lot of problems in the onboarding process before they happen, improving the overall employee experience. Preppio customers have gone from low new hire survey scores to great results and retention in a matter of weeks.
Considering the cost of unwanted employee turnover, estimated at $5–20 thousand per employee, the ROI for Preppio is realized very quickly.
“We calculate saving more than 10 FTEs per year by using Preppio due to reduced turnover, less travel, and time spent on manual tasks.”
Terje Eid-Hviding, former Global Head of Recruitment and Development, Norwegian Air
Why we invested in Preppio
The TVG investment thesis for Preppio was based on five key criteria including 1. The Preppio team, 2. Product-market fit, 3. Great market opportunities, 4. Strong traction with a great client base, and 5. Powerful solution and product expertise.
1. The Preppio team — As explained in our article about HYRE, the TVG team and our company philosophy are very people-centric. Right away, we noticed that the Preppio team is a strong one, a committed, skilled team of serial entrepreneurs namely the CEO Amin Fard and the CTO Reza Shamshirgaran.
Preppio CEO Amin Fard has two successful startup exits under his belt, namely MoneyGram (NASDAQ: MGI) and NextGen Tel (OSE: NGT). During the first call with Amin, we understood the ‘big vision’ for Preppio and could sense his commitment to building a global category leader by addressing one of the biggest problems companies face with talent today.
Along with Amin, Preppio’s CTO Reza Shamshirgaran has vast experience in leading large product teams at Cisco and experience working for multinational organizations including Microsoft, and the United Nations.
2. Strong customer needs — In addition to the incredible people leading Preppio’s success, the TVG investment team spotted the company’s strong product-market fit. Employee onboarding is something that rarely works. It is human nature to be forgetful or lose interest in a process, which can become expensive when new hires quit due to a lack of onboarding and never feeling part of the team. The timing has never been better to address employee onboarding given the new workplace environment involving gig workers and hybrid/remote workers as well.
Companies looking to save costs on office space and salaries will divert this spending to investing in tools and technology to make remote work a long-term option. Giving employees a better onboarding experience when they are working remotely helps motivate them to be more productive in their roles.
3. Great market opportunities — Preppio is also positioned in a sweet spot of the HR and Talent Tech market. The employee onboarding software niche had a value of $928 million in 2020 and is estimated to reach $2.6 billion by 2029, growing at a CAGR of 12.2%. This was a definite mark in favor of investing in Preppio, and so is the potential to expand to other vertices in the EX market, which is estimated at over $300 billion and includes training, development, performance management, employee well-being, and support, communication, and engagement platforms, plus the additional need for more technology to support and manage all of these tools.
4. Strong traction with a great client base — Preppio has had strong traction since its inception and was one of the first partners globally of the Workplace by Facebook collaboration toolbox. The company has also earned the trust of large enterprises that count on the value Preppio brings to their employee onboarding strategy, including Norwegian Air, Scoot, Air Asia, Domino’s Pizza, and more.
5. Powerful solution and product expertise — Preppio’s expertise in the employee onboarding domain is strong thanks to its lead scientific advisor, Dr. Talya Bauer. Dr. Bauer is a leading researcher on employee onboarding and has been cited over 16 thousand times on her breakthrough process, which is incorporated into the Noogle program at Google. As the chief scientific advisor of Preppio, Dr. Bauer’s methodology is the strong foundation that makes the platform so successful.
Milestones
Since joining the TVG family of companies, Preppio has continued its successful path and added several new clients. Another big milestone achievement will be the book on employee onboarding that Dr. Talya Bauer and Amin Fard of Preppio will publish later this year.
