HR Tech – Trends Affecting M&A Activity

About the Episode

Hiring velocity has doubled in the previous ten years, and the gig economy is expected to double to over half of the workforce by 2029. How are these and other trends affecting HR technology companies and M&A activity in these markets? Join us as we discuss the current state of HR Tech M&A and what the future holds for this industry.

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In this Episode

1:20 What are the current trends in HR Tech?
3:20 What’s driving the gig economy?
4:00 Are market dynamics different by region?
4:20 How are these trends affecting M&A activity?
5:50 What framework or perspective do you use to analyze the HR Tech market?
6:50 Vertical vs. horizontal acquisitions
6:40 How does company size affect acquisition strategy?
9:45 PE vs. VC investments in HR Tech
10:45 What goes into the buy vs. build decision?
11:40 B2B vs. B2C business models
12:45 What are the current pricing guidelines and multiples?
13:45 Bootstrapped vs. VC-backed companies
14:35 What are the keys to success for bootstrapped companies?
15:45 Lower middle-market transactions
16:00 Who are the buyers in HR Tech?
17:10 What’s the appetite for organic vs. inorganic (acquisitions) growth?
18:45 How does a growth equity investment work?
22:15 What is the investor’s time frame?
22:45 What are the biggest integration challenges?
24:40 What are the major differences in transaction structure for tech companies?
25:45 What’s a typical transaction structure?
26:50 Does the owner need to remain to run the business post-closing?
28:40 What should a tech company owner do to prepare their company for sale?
29:20 What should you look for in an investment banker?
30:50 How much prep work needs to be done before you go to market?
31:30 Do you go to market without an asking price?
32:00 How accurately can you predict the sales price?
32:30 How involved should the seller be in negotiations?
33:10 How does the auction process work?
34:25 What’s the most difficult part of the process?


  • The hiring velocity has doubled in the previous ten years.
  • The gig economy is expected to double to over half of the workforce by 2029.
  • Workers have access to more information regarding compensation now.

Meet Our Guest

Jim Holzer

Jim Holzer

Managing Partner at Drake Star

Jim Holzer has over 25 years of experience completing M&A and financing transactions for leading software and technology-enabled services companies. Jim is a seasoned advisor to management, directors, and investors specializing in M&A, recapitalizations, and growth equity for leading software, tech-enabled services and technology companies, and has completed over 100 deals aggregating over $15 billion. Since joining Drake Star in 2012, he has been active in advising clients on sell-side M&A and private placements involving strategic buyers and financial investors. Prior to joining Drake Star, Jim held senior technology M&A roles at large full-service firms including CIBC World Markets and Prudential Securities (now part of Wells Fargo) as well as at middle-market investment banks including Houlihan Lokey, Brown Brothers, and Berkery Noyes. Jim holds an MBA in Finance from New York University’s Stern School of Business and a B.A. in Economics from Emory University.

Location Location: New York

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