Here’s the Real Reason Entelo Just Got $20 Million

Entelo just raised $20 million. Party time!

I spoke to CEO Jon Bischke when it launched publicly in 2012 and was impressed by him and the company’s mission. As its website said back then, “Learn when talent is on the move before your competition does … Entelo’s patent-pending algorithm looks at 70+ variables that are leading indicators of an upcoming career change.”

The company has evolved, as it’s more about managing the data versus stockpiling data, but the vision is basically the same. As Bischke said in a Techcrunch interview this week, his priority for the company is improving the matching process that occurs behind the scenes. For instance, the company has a solution that integrates with data in your ATS to discover candidates more efficiently.

The real focus on the investment, however, is the future, and that points to artificial intelligence. A release about the recent investment says, “The company will use the new funds to continue its investment in artificial intelligence (AI) and to accelerate hiring across all teams.” The press release’s subhead highlights AI, so you know it’s important.

AI is the new mobile. And as such, investors everywhere are throwing chips on the table in hopes of cashing out. It’s convenient to say $20 million in new capital will be going to advancements in A.I., but the real motivation is riding the wave and being hooked by a big buyer. And all signs point to that happening in the next couple of years.

Let’s start with Google. The 800-pound gorilla is getting into AI in a big way. It’s also getting into employment in a big way. Google already has an API that improves job search on job boards and company websites, and rumors are starting that a similar API will eventually be released that helps find the people in your database a lot more efficiently.

Then there’s Microsoft, which bought LinkedIn for a little over $26 billion, which puts it squarely in the employment space. Does anyone think Microsoft won’t work to make LinkedIn search a lot better than it is now? Of course not. Then there’s Facebook, whose employment products’ banner ads litter my feed everyday. Even Amazon is rumored to be in negotiations to buy Slack.

Google releasing a search API for internal data and wrapping that in an artificial-intelligence wrapper alone would freak out a lot of HR tech providers, many of whose search is still stuck in the early 2000s. As a result, the wallets would start opening. Companies like Salesforce, Workday, Taleo, and maybe even Indeed would start wanting their own search solution, but can’t build it on its own, and begin gobbling up companies like Entelo.

Entelo’s brand as an early mover, track record of profit, and level of investment capital make it a good bet to be one of the first to be acquired when the AI fervor spikes, sometime in the next 24 months if I had to make a wager. And assuming that happens, anyone investing in the company now will look pretty smart.

“The impact of data-driven and data science-driven talent acquisition is going to be tremendous,” said Bischke in a company release. “This round enables us to accelerate product development that will underscore Entelo’s position as the market leader in applying the latest technologies to the hiring process.”

The price the eventual buyer is going to pay in the coming months will be pretty “tremendous” too.