Rich Barton knows a thing or two about network effects. The man who founded Expedia and co-founded Zillow has demonstrated a knack for building massive companies that grow more entrenched as they increase in scale. For his third act, Barton’s looking to follow a similar playbook with social jobs and career information platform Glassdoor.
The six-year-old company has largely cornered the market on employer ratings, reviews and compensation data. Today’ Glassdoor is announcing a $50 million Series E round of funding led by Tiger Global Management, with participation from Dragoneer Investment Group and existing investors, Benchmark Capital, Sutter Hill Ventures, Battery Ventures and DAGVentures.
The round brings the company’s total capitalization to roughly $93 million and is likely to be its last private financing before what Barton admits is looking like an inevitable, and increasingly imminent IPO. This should come as little surprise given the involvement of Tiger Global, a late-stage investor who is notorious for taking big bets on companies shortly before they enter the public markets.
“I think this financing round marks an inflection point in terms of the public awareness and adoption of Glassdoor,” says Barton, who is now Glassdoor’s non-executive Chairman. “It’s now the case that the majority of job searches in the US end up utilizing Glassdoor.”
The purpose of the round is to further press the accelerator and to take advantage of Glassdoor’s considerable lead in the market, Barton says. The company already sees 25 percent of its traffic coming from outside the US, despite no localization or global marketing efforts. Given this organic demand, the plan for the next year is to launch an aggressive international expansion effort. In addition, Barton says that improving Glassdoor’s mobile products will be a major priority.
The next year should be a busy one, as the company plans to expand its staff from 200 to 300 over the next 12 months. Growing this quickly is a risk for any company, as is expanding across international boarders. That said, much of Glassdoor’s senior team has executed this playbook before while at Expedia, giving the company a major leg up as it begins to look at the world map like a game of Risk.
Glassdoor started out as a tool for job seekers to share and source information about prospective employers. But as the site’s user community has grown, it has expanded into one of the largest talent recruitment platforms in the world. With this shift has come considerable revenue growth, to the tune of a 160 percent compound annual growth rate (CAGR) over the last three years.
The idea for the company came when Barton accidentally printed a list of Zillow employee salaries and performance reviews to a public area printer. The snafu caused a brief panic, he recalls, but he quickly found himself asking why it would be such a bad thing if this information got out. Glassdoor was born shortly thereafter, and while the mechanics of getting to this point have shifted along the way, the destination has hardly deviated from his earliest vision, Barton says.
Much like Yelp and TripAdvisor demonstrated in the retail business and travel categories, user-generated ratings and reviews are a near limitless source of content that at scale create an enormous competitive moat. Barton describes both businesses as the model on which Glassdoor was built.
“User reviews beget more user reviews,” he says. “It’s a virtuous cycle. The more time passes and the more content a business gathers, the bigger the barrier to entry.”
Today, Glassdoor has more than 22 million registered members and proprietary data on nearly 300,000 companies in 190 countries. The company serves more than 14 million monthly unique users, with approximately 35 percent of this usage coming via mobile devices. Glassdoor has native apps on both iOS and Android.
The platform also grown to host 15,000 free employer accounts, a figure that is up six-fold in the last year, and more than 1,500 paid premium employer accounts, including household names like Facebook, WalMart, PepsiCo, VMWare, and Nordstrom. Paying users get access to enhanced employer profiles, job ads, and display advertising. The premium platform also offers advanced analytics, enabling employers to monitor their reputation and recruiting effectiveness, as well as benchmark their performance against industry competition.
With nearly all forms digital content consumption rapidly shifting to mobile devices, the prudent question to ask about any company is whether its business model can withstand the transition. Glassdoor’s premium employer profiles should translate well to mobile, Barton says. At the same time, he acknowledges that its CPC-based (cost per click) revenue will suffer as a result of lower mobile ad rates relative to those available on the desktop Web. This is the same challenge facing Facebook, Twitter, and any other company looking to monetize eyeballs through mobile advertising. Prevailing wisdom suggests that the ad rate disconnect is a short term problem. The problem is, no one knows what short term really means.
LinkedIn, Monster.com, CareerBuilder, and others have proven that recruiting is a massive and potentially highly-lucrative market. Glassdoor has positioned itself to be the next breakout winner built on matching talent and employers, while eliminating information gaps for both constituencies.
“All three of my companies have come from the same spiritual place: empowering regular people to make better decisions through increased transparency,” Barton says. “CEO ratings didn’t exist before we invented them. It’s a power to the people thing.”
Barton’s motives may not be quite as Zen as he’d have you believe, but he’s proven himself more than capable of seizing massive market opportunities when they present themselves. Both Expedia and Zillow’s market caps currently near their all-time-high at $8.19 billion and $2.8 billion respectively. Glassdoor has its work cut out for it reach or surpass these massive valuations, but as the expression goes, the third time’s the charm.
[Image via Glassdoor]