Mesh, a platform that helps people manage the workforce — tools to run performance reviews, employee feedback, and commendations; tools to set and track goals and other long-term career plans; and analytics to get a bigger picture of how a workforce is working – has really become a business in the last couple of years as our concepts of “office” and “staff” have been magnified by the challenges of a global health pandemic. Now, the eponymous startup has closed a major funding round with a big valuation — $175 million, a Series F that values Lattice at $3 billion — underscoring the ground it has gained in the market and the ambitions it has for the future. future .
Thrive Capital, Elad Gil, Tiger Global and Dragoneer led the round, with previous sponsors Founders Fund, HighSage Ventures, Shasta Ventures, Fuel Capital, Khosla Ventures and several new angel investors also participating. The funding, which brings Lattice’s total raised to $330 million, comes just 10 months after the company last raised (a Series E in a $1 billion valuation). Jack Altman, the founder and CEO, told Ploonge that he was proactively approached this time due to strong growth.
The company now focuses on desk workers, called “information” or “knowledge,” with its 3,550 deals increasing by more than 1,000 since the last round. Lattice’s customer base is heavy on tech companies residing in their own backyard and includes companies like Slack, Turo, Clio, and many others. Deskless frontline workers aren’t currently part of Lattice’s mandate — they require a significantly different set of tools and often priorities than those who sit at computers all day, but Altman didn’t rule out that this would be a challenge. segment that likes to face ahead.
Lattice’s growth in the market is in part because its tools match today’s work climate. The world of work has changed significantly in the last two years. Thanks to Covid-19, many people who traditionally entered offices are now working from home or in other smaller, more localized environments. What hasn’t changed, though, is that this workforce still needs to operate as a cohesive team, where people can communicate about what they’re achieving and what they want to do, and managers can get an idea of what they’re doing to reward them or identify ways to work better.
Lattice had been growing at a steady pace for several years before Covid-19 spread across the world, but it was the pandemic that really brought to light just how important people management can be when it’s effective (and being effective means having that people are actually willing to use, as there are so many out there that feel more like chores than helpful helpers).
“We built a lot of products and got a lot of traction [before the pandemic] but the world we live in today has accelerated things for a number of reasons,” Altman said in an interview. “The office environment allows for a lot of interpersonal exchanges, connection and learning. It’s not that you don’t need software for managing people in the office environment, but when you don’t have those connections, you still need to feel like you work for a greater purpose. We’re looking at a box all day now, and we don’t have a manger that comes and says great work and makes us feel appreciated. Systems like Lattice provide a process of how we connect and interact and ensure that I know I am cared for by our manager as a professional and a person. Covid-10 created this tailwind.”
Another surprise was the economy: many assumed in the spring of 2020 that everything would sink, and some things did indeed struggle, but the entire economy did not collapse, unemployment leveled off, and some employees began to realize that they had some bargaining power due to to hiring demands. This has also led to a greater push for better people management tools.
Altman characterized the thinking as, “’Gee, we have to invest more in people if we want to keep them.’ That became the economic backdrop.”
People management as a broader part of enterprise IT has seen a lot of evolution in recent years: companies like Workday, which dominate HR software, have built extensive toolsets into their larger platforms to manage areas such as performance and compensation; and there are a number of pure companies, like 15Five, that also specifically focus on areas like goals and praise. Lattice both partners with bigger platforms and also competes against them. I suspect the latter will become a more dominant part of these relationships as Lattice continues to add more functionality to its own platform. (In recent years it has added performance management and then engagement surveys and now a host of career development tools.)
“The long-term plan is to keep building and expanding,” Altman said.
Expanding the platform and functionality within it, serving a rapidly growing customer base, holds great promise for investors.
“We’ve seen some broad trends come together in recent years – the rise of remote work, the evolution of the role of HR – that have fueled the HR market,” investor Elad Gil said in a statement. “Lattice’s approach of creating a broad set of interconnected offerings resonated and led to really exciting growth.”