News broke earlier this week that iCIMS, an applicant tracking system, had acquired TextRecruit, a text messaging and live chat communications platform for employers. “This couldn’t be a better fit,” said Erik Kostelnik, TextRecruit’s co-founder and CEO. “TextRecruit and iCIMS share the same vision for transforming the recruiting technology market.”
The two aren’t strangers. Back in 2015, the two officially partnered to provide text messaging on iCIMS platform. “Companies such as Cracker Barrel, Next Retail, and ERC BPO, that leverage the iCIMS/TextRecruit integration, experience measurable improvements in their organizational efficiency and a much greater return-on-investment than using disparate applicant tracking and text campaign management software,” wrote Birch Faber, TextRecruit’s director of marketing at the time. Here’s a video demo.
The partnership isn’t unique, of course. In fact, TextRecruit integrates its technology into a wide variety of recruiting platforms. Names like LinkedIn, Nexxt, Smashfly, Taleo, Indeed, and many more are all integrated with the text messaging solution. Few would argue that TextRecruit has done a brilliant job building the go-to brand for employers looking to leverage SMS communications, thanks to partnering and white labeling its tech.
And therein lies the the genius behind iCIMS acquiring the company. Aside from the fact that messaging is killing email and InMail in terms of open rates and response rates, iCIMS has quietly bought up of the industry’s most dangerous Trojan horses, if they choose to use it in such a fashion.
Granted, they’re both saying all the right things to keep customers and partners calm. TextRecruit’s blog post answering questions about the acquisition says anyone not using iCIMS will still be able to use the service. Make no, mistake, however. iCIMS’ competition should be very jittery at this move.
That’s because there are so few competitors to TextRecruit, which not only gives iCIMS a really big stick, but it makes iCIMS the only one with the really big stick. Imagine if SiriusXM radio had 90 percent of the in-car entertainment systems. That’s not the case, but stick with me. Now, imagine Ford acquires SiriusXM. In that position, Ford could impose a nasty toll on other car makers for the privilege to have SiriusXM in their cars.
In a doomsday scenario, iCIMS shuts everyone down and becomes the only place where employers can leverage TextRecruit’s technology. Doubtful that would happen — at least overnight — but it could.
Granted, there are competitors to TextRecruit, such as startup Canvas, which should keep everyone honest. However, there’s nothing that says those companies can’t be acquired as well. In fact, I’d be shocked if a wide variety of applicant tracking systems, job boards, and others aren’t putting TextRecruit’s competitors on speed dial.
“As proven by this acquisition, there is a significant demand for using text messaging to recruit today’s talent generation,” said Aman Brar, Canvas founder and CEO. And so few companies servicing this demand means iCIMS is in a very good competitive position today.
It’s fair to argue that text messaging is simply a feature, as opposed to a standalone product, but text messaging isn’t as easy as downloading a WordPress plugin. There’s expertise involved in text messaging that can’t be found everywhere. Granted, tools like Twilio make the business easier than ever to duplicate, but that still doesn’t make it easy. There are also government regulations and global hurdles to keep in mind for hopeful competitors. Plus, the people getting into this game aren’t jumping into employment; they’d rather help big consumer brands.
Terms of the deal were not disclosed. However, TextRecruit received it’s only venture investment of $3 million last year, which means a final price tag of at least $30ish million would be expected. TextRecruit launched in 2014 and touts over 200 customers including VMware, Kindred Healthcare, Sodexo, Waste Management, and the U.S. Marine Corps.