The Sydney-based HR tech startup is gearing up for expansion after a trifecta of wins this year. They recently raised nearly $1 million in Seed funding in June and won the Burning Heroes Award for Global Reach in November after a successful venture to the UK as part of the New South Wales Government’s Going Global Export Program.
I spoke to co-founder Fiona Vale about Humanico’s journey from idea to global expansion, and her plans for growth in 2024.
Helping organisations unlock human potential
Co-founders Fiona Vale and Paul Rush launched Humanico in 2020 after they observed executives grappling with recruitment costs and HR solutions that didn’t provide a comprehensive picture of staff capabilities.
Evaluating staff capability is also expensive. Assessment programs can cost up to $10,000 per person, and tend to be limited to executives and high performers. Consequently, “85% of employees globally are never invested in the workplace” says Fiona, quoting a statistic from the 2017 State of the Global Workforce Reportby HR analytics firm Gallup.
This means organisations miss out on the benefits of engaged employees. The same report also found that organisations with highly engaged employees are more profitable and productive than those with disengaged employees.
It was a lightbulb moment for Fiona and Paul.
“That was probably the key catalyst where we thought: You know what? We've got to try and do something about this to create a cost effective way to digitally surface capability and engagement in organisations,” Fiona remembers.
Meet the Human Map - a digital world first for visualising workforce intelligence
Humanico’s solution is the Human Map, the world’s first digital interactive map of employees. The cloud-based platform visualises employee capabilities and engagement levels in a dashboard, and provides data insights to enable executives to make informed decisions on optimising their workforce.
The Human Map is accompanied by Humanico’s consulting service, HumaniCOACH, which provides strategic HR advice to organisations.
Humanico’s strategic edge
What makes Humanico unique is its holistic approach to HR beyond the conventional focus on skills and qualifications. In a market occupied by established companies such as Workday and IBM, which focus on operations such as payroll and attendance, Humanico’s niche is the strategic side of HR.
“Humanico is a strategic HR tool, which really helps you with workforce planning and optimising that asset that you already have,” says Fiona. “Other platforms that are strategically oriented take a siloed approach to talent management. They consider engagement in isolation and skills in isolation.”
Global from the ground up
Humanico’s relationship with startup coworking hub, Stone and Chalk, has opened doors to global opportunities - including helping them access the New South Wales Going Global Export Program to the UK in June 2023. The Program was a good fit with Fiona and Paul’s vision for international expansion.
“We’ve always designed Humanico to be a global solution,” Fiona says about the experience, which resulted in Humanico securing a UK-based investor. They also forged new relationships to explore partnership and distribution opportunities in the region, including potential partnerships with UK consulting firms as an HR solution provider.
Surprisingly, Humanico’s UK reception was more fruitful than their previous visit to the US, where Fiona found investors to be more cautious about being early adopters of AI-based HR applications.
While other Australian startups such as Avarni have gained strong traction in the US (which was very receptive to Avarni’s AI-powered carbon accounting software), Humanico had more success in the UK.
Expecting the UK market to be more conservative than the US, Fiona discovered it was the opposite.
“The reception in the UK was 100 times what it was in the US. The UK is open for business!” she says of the UK market’s openness to new applications of AI.
Humanico is making the most of this by focussing on the UK as a springboard for international expansion. Co-founder Paul’s British background has also facilitated Humanico’s market entry and cultural alignment. Fiona notes that “the US market is still a huge market for us, but it feels like we can quickly get stronger traction in the UK and use that to springboard our international expansion from the UK into the US - and not the other way around.”
Capital raising crossroads
Humanico successfully completed a Seed raise of nearly $1 million in June this year. The company delivered a four times return on their pre-Seed round and had several investors follow on.
Until now, Humanico has intentionally obtained capital from high net worth individuals. The next milestone is Series A funding, which Fiona says will be a learning opportunity in meeting the metrics that VCs are looking for, given that Humanico hasn’t received any VC money to date.
At the same time, Fiona believes Humanico is now at a stage where prioritising revenue growth may be more beneficial than initiating another funding round, since the time consuming nature of raising capital diverts time away from building the business.
She acknowledges these goals aren’t mutually exclusive, but is leaving her options open for now. Meeting customer acquisition targets will help with revenue growth as well as position Humanico as an attractive investment opportunity to VCs. On the other hand, if Humanico achieves sufficient growth, Series A funding may not be needed just yet.
Land and expand: Humanico’s growth agenda for 2024
Humanico’s ambitious growth plans for next year revolve around developing a new service offering and expanding the team to scale up business operations, which Fiona is very excited about.
She plans to test a “land and expand” strategy to complement Humanico’s core value proposition as a B2B SaaS provider, delivering information and insights to optimise the human assets of companies. The strategy involves using Humanico for smaller proof of concept or pilot projects with mid-level managers and small teams before expanding it to the rest of the organisation. The approach would be bookended by HumaniCOACH’s consulting services provided at the start and end of a project.
It’s a way to build momentum for increasing the usage of Humanico throughout the organisation. “What's lovely is when you start to see the contagious enthusiasm because the whole programme is underpinned with positive sight. So when you can make a difference in proving a model within an organisation, it's much easier to then expand out,” Fiona says.
Humanico is also currently pursuing 57 prospective customer opportunities, both local and global, for conversion. These not only include big consulting firms but also the Australian Public Service, where Humanico has been engaging with Federal and State Governments about staff mobility.
Fiona sees this as an opportunity to demonstrate Humanico’s versatility in different sectors because it’s an industry agnostic product. “We have strategic targets against which industries we want to work with and the size of organisations that we want to work with,” she says.