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Pallet - Fuelling The Next Generation Of Hiring

Access The Highest Quality Talent On The Internet

 

Welcome to the Venture Scout newsletter, where we break down the top early-stage software startups in the world. This week’s Startup feature is Pallet.com. Pallet is a hiring platform that leverages community to connect high-quality employees with incredible employment opportunities. Find the dream candidate for your role today with Pallet!

Company & Team Introduction

Pallet.com is a software company that builds community-based hiring tools. The company was founded by Kai Han @hankai1998 in 2020 after he witnessed his friend, also the smartest kid at his College, the University of Oxford, struggle to break into an industry he was passionate about, climate change. He ended up taking a job at Goldman Sachs, a fantastic opportunity but a far cry from his true environmental passion. This opened Kai’s eyes to the many inefficiencies in the hiring market today and motivated him to build something that helps great people get hired; later that year, Pallet was born. Fast forward to 2023, their team has grown to ~25 employees and is headquartered in New York City, NY, but the company has also chosen to build their team remotely to broaden its potential talent pool.

Product Overview

Pallet is an employee recruitment platform with a novel approach to hiring. Scattered throughout the internet are thousands of communities made up of highly qualified software engineers, marketing, sales, HR, etc. employees. Pallet’s team capitalized on this massive opportunity and built a suite of hiring tools using trusted industry-leading B2B creators and communities to help get their members incredible job opportunities from leading technology companies such as Shopify, Coinbase, and Webflow. By leveraging the vast social networks of B2B creators and communities, industry-leading creators can place highly relevant jobs on their job boards to share with their community and build out highly skilled talent collectives they can personally vet, match based on skillset, and organically introduce to companies looking for talent.

Total Addressable Market

The market opportunity Pallet is pursuing is gigantic and remains high growth for the foreseeable future. The estimated total addressable market for global online recruitment in 2022 was 31.37B and is poised to explode to over 58.16B by 2030, for an impressive compound annual growth rate of 7.1% through the period.

Business Model & The Numbers

Pallet uses a two-tier pricing model where companies can either pay $0 upfront + a 20% base salary fee (1-3 roles to fill) or custom enterprise pricing for companies with more than three job openings. Both tiers provide access to their curated talent pool, a feed of pre-qualified inbound candidates, and a dedicated account manager and sourcer. Pallet has paid over 3.5 million dollars to their communities and helped over 100 thousand community members get hired by industry-leading companies like Airtable, Dropbox, and Shopify. The average experience of candidates on Pallet is 6+ years, and members of these communities are passionate and continuous learners looking to improve their skills, which provides businesses with top-tier talent. 94% of candidates are more likely to respond to a company on Pallet than anywhere else.

Traction

Pallet's novel approach to connecting talent has yielded strong early results for the company, with an impressive list of massive companies that have used Pallet’s talent solution, including Ramp, Pocus, and OpenStore. More importantly, Pallet has done an excellent job acquiring many top business-oriented creators to create talent collectives such as product guru Lenny Rachitsky that writes Lennys Newsletter with over 500k subscribers, ex-Uber engineer and writer of The Pragmatic Engineer, a newsletter with over 480k subscribers, Packy Mccormick general partner at the Not Boring Fund and writer of the Not Boring Newsletter with over 210K subscribers, and many other top B2B creators with highly talented groups of specific skillsets (product, engineering, or vertical focused like Venture Capital or Private Equity job boards). Over 450+ companies have already adopted Pallet to improve their hiring experience and find the right candidate.

Competitors

Pallet’s opportunity is massive, but online recruitment is a highly competitive industry. Pallet doesn’t have any direct competitors due to its unconventional community-driven approach. Nonetheless, numerous formidable competitors exist to help people hire the right candidate, including large hiring agencies, LinkedIn, and legacy hiring platforms like Indeed and ZipRecruiter, among others. Even with this highly competitive industry landscape, Pallet only needs to capture a small portion of its market to become a massive success.

Deal Terms

Since its founding in 2020, Pallet has raised two funding rounds. First, they raised a 1M pre-seed round in late 2020 from top firms like Unpopular Ventures, FullCircle Fund, and angels like Replit & ex-Webflow executive David Hoang. Pallet opportunistically raised their subsequent round in 2021, raising a 3.9M seed round led by Backend Capital and Long Journey Ventures with participation from firms such as Bossanova Investimentos.

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