HR Tech Isn’t Dead—You’re Just Building It Wrong

In an environment where HR tech startups are dying of thirst, Ashby just took a swig from the Series D firehose. Yesterday, he company announced a fresh $50 million in funding, led by Alkeon Capital, bringing its total raised to $100 million—and, more importantly, doing so with a sub-1x burn multiple and most of its Series C capital still in the bank.

Translation: they didn’t need the money. Investors insisted they take it.

In 2024, total VC funding into HR tech dropped more than 60% year over year, and the ATS category saw almost no significant new funding outside of recapitalizations and down rounds.

For Ashby to close a $50M round in mid-2025, while nearly doubling ARR and avoiding the kind of hype-driven “AI-enabled” sleight of hand that usually precedes such rounds, speaks volumes.

The market may be freezing over, but Ashby is clearly the exception—and potentially the prototype for what a next generation of emerging TA tech companies should look like as they attempt to succeed at scale.

What Ashby’s Success Says About the State of TA Tech

It’s not that applicant tracking is hot again. It’s that Ashby has made it hot by doing the hard things that others ignored.

First, they built the thing right: Ashby’s platform is fully integrated from the ground up, meaning their scheduling, CRM, offer workflows, and analytics aren’t duct-taped together via Zapier (who, fittingly, is actually an Ashby client) or embedded iframe.

That means faster load times, cleaner data, and higher user satisfaction. More than 135% year-over-year ARR growth is the payoff for building a product that doesn’t suck—and that can sell itself. In fact, it mostly has. 80% of Ashby’s revenue growth in the past year came from customer referrals and organic expansion.

They now claim to serve more than 2,700 companies, more than doubling their customer count in just 12 months; further, interviews scheduled via the platform grew 170% in the same period. Even in today’s cautious buying climate, when hiring is flat or down across the board, Ashby’s product-led growth engine is moving like it’s 2021 all over again.

And unlike the HR tech zombies shuffling from layoff to bridge round, Ashby is actually hiring—intentionally, but consistently. They grew headcount by 55% over the last year and are still profitable (or close to it, depending on how you count “growth efficiency”).

Which is to say, they’re actually managing a business, not a cap table. Which is kind of refreshing these days.

The ATS Isn’t Broken. Yours Just Sucks.

Let’s be clear: there is nothing new about the applicant tracking system category, although it remains perhaps the most essential component of any talent tech stack. What is new, however, is someone making one that people actually like to use.

Most of Ashby’s competitors—Greenhouse, Employ, iCIMS, et al—spent the last decade chasing enterprise buyers, aligning their roadmaps much more closely with RFP requirements than those of recruiters and candidates. You know what I’m talking about.

Stuff like career site builders, agency portals, job post distribution, embedded “programmatic” platforms, integrations nobody asked for, specious AI features and functionality or any of the other product marketing campaigns doubling as product releases these days.

These may check all the right boxes during the procurement process, but they do little to actually impact critical recruiting benchmarks like time to fill or cost per hire. Ashby, by contrast, focused on the one thing that actually moves the needle in talent acquisition: speed.

The average time-to-hire in the U.S. was 44 days last year. Ashby customers report an average of 28 days. That delta isn’t just a recruiting win—it’s a business win, especially when hiring for revenue-generating roles. Ashby estimates that their customers have saved over 2 million hours in scheduling time since launch. And in a world where recruiter headcount has been slashed across the board, time is money.

Their AI strategy also deserves credit—not because it’s flashy, but because it’s sane. Ashby doesn’t promise AI will do your hiring for you; instead, it offers autocomplete for workflows, auto-summarization of interviews, and suggested outreach messages that sound like a human wrote them.

Usage of AI features on Ashby grew 50% last year, according to the company—but not at the expense of trust or transparency. I’m not a big fan of how ATS’ have coopted and misappropriated the concept of “AI,” but in Ashby’s case, what they’re really describing is recruitment process automation and data driven optimization.

Ultimately, as seen in the quantifiable results Ashby seems to be producing, there’s quite a bit of empirical evidence that this approach to “AI” is actually working.

The Long Game: Cautionary Tales of VC and Hubris

Here’s the part where I remind you that raising a big round is not the same thing as winning.

Look no further than Beamery, which raised $138 million to build an “AI-powered operating system for talent.” They became the poster child for buzzword-driven product sprawl: CRM, internal mobility, DEI analytics, workforce planning—the works.

But growth stalled, use cases confused buyers, and most revenue ended up driven by services and implementation—not software. They recently raised more money from capital markets, but unfortunately, this one time unicorn’s was forced to turn to debt financing.

At the time, the company stated they intended “to allocate the funding to support its growth plans and development,” because apparently the $138M they’d already gotten for ostensibly that exact same reason was not, in fact, enough.

Or take SmartRecruiters, which raised a $110 million Series E at a $1.5 billion valuation in 2021 (disclaimer: I was a part of the team responsible for working on raising this round, and even at the time, that number seemed multiples too high).

By 2023, they were laying off staff (on this, I was an early adopter) and pivoting away from product innovation to focus on “solutions consulting.” They got caught trying to scale upmarket while the market was scaling back, and ended up overbuilt for a shrinking TAM.

Fortunately, new CEO Rebecca Carr seems to be turning around the ship (the Gallic bateau was well sunk), with their new focus on automation and process optimization via their recently launched “real time AI recruiting companion,” WInston – which is actually a pretty impressive pivot for a legacy player that only recently looked to be headed straight to the HR Tech graveyard.

And who can forget Scout Exchange? They raised $100M+ as a “marketplace for recruiters,” promising AI-driven matching between agencies and employers. But they never broke out of niche use cases and are still treading water against all odds, even if their original investors went under that water long ago.

All these companies had real funding, real traction, real vision—and they still lost momentum. Ashby has avoided that fate by staying disciplined, keeping a narrow product focus, and aligning their roadmap with actual user behavior instead of paying for placement on a Gartner Magic Quadrant.

But that focus will be tested in the next phase.

The Deal After the Deal Sheet

First, they have to navigate scale without losing identity. Cultural coherence doesn’t scale automatically, and neither does the elegance of a product built by a small, tight-knit team. Growing from 200 to 1,000 employees, which they’ll likely hit in the next 24 months, means new layers, slower decisions, and more meetings. If they lose the product speed that got them here, they’ll start to feel like the legacy players they’re replacing.

Second, they need to make the jump from startup darlings to enterprise partner. Ashby has proven it can win in mid-market and with high-growth startups. But eventually, to justify the valuation implied by this raise, they’ll need to win deals with logos that start with “Fortune” and end in “500.”

That requires SOC2 compliance, global payroll integrations, and onboarding flows for 10,000 employees—less sexy, but absolutely essential. Just ask companies like Greenhouse or Lever, whose market momentum was effectively killed by their inability to scale to meet the needs of multinational clients or multinational employers with multiple entities.

And finally, they have to stay paranoid. Just because the market sucks now doesn’t mean it will forever. More funding is coming back into HR tech, and someone’s already building the next Ashby—and probably using Ashby to hire their founding team.

The moment they take their foot off the gas, someone else will floor it.

Ashby’s Series D isn’t just a funding round—it’s a signal that TA tech still has life, innovation, and a future beyond endless spreadsheets and interview no-shows. They’re not just selling software; they’re reshaping how recruiting works, with the metrics and momentum to back it up.

But as we’ve seen before, momentum is perishable. It’s what you do after the round closes that counts.