Catalant Raises $41 Million to Expand Its Transformative Enterprise Talent Solution and Bring in the Future of Work

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Boston-based Catalant, perhaps the leading technology platform for “business expertise,” announced this week that it has raised an additional $41 million in private equity. This brings the total investment in the company to $73 million since its founding in 2013.

The new investment, which comes from the full complement of earlier investors (including Greylock Partners, GE Ventures, Mark Cuban), signals continuing confidence in the company and its future. "Catalant is a transformational company led by one of the most impressive executive teams we have ever backed,” said Dan Nova, partner at Highland Capital Partners.

According to the press release, Catalant serves thousands of clients (including nearly a quarter of the Fortune 100) and has established a provider network of more than 40,000 an independent business experts, bespoke teams of consultants and boutique consulting firms. The company also reports that this year it anticipates reaching annual revenue of $50 million, a combination of market transaction fees and enterprise solution fees.

Catalant’s Journey to The Future of Work

Spend Matters has covered Catalant since its earlier days (then HourlyNerd) as a pure-play online marketplace that allowed businesses to engage highly qualified independent business experts (and vice versa). From that time to the present, we have witnessed an ongoing evolution from being just an online marketplace to becoming an enterprise talent solution.

The enterprise solution goes beyond simply supporting the engagement of external independent talent to enabling enterprises to reinvent how they dynamically organize external and internal talent, execute high value work and critical projects, support collaboration and manage/reuse project outputs.

“Catalant's additional financing demonstrates further validation of the market's acceptance for a technology-driven, dynamic approach to talent that allows businesses to find the right skills and expertise, no matter where it sits,” the company said in the press release. “The funding will be used to further develop the company's best-in-class software products and matching capabilities, as well as to educate corporate decision makers on how best to incorporate dynamic talent into their strategic plans.”

And What Do Catalant’s Co-Founders Say?

"The company of the future will think differently about what it means to be a member of a 'team' working on business problems together,” said Catalant Co-founder and Co-CEO Patrick Petiti in the press release. “Team members won't just be the people that sit inside a company's walls or have a company email address. Companies will have access to the entire globe of talent and will find the best person to get the work done, when it needs to be done, regardless of where that person sits.”

We had a chance shortly after the announcement to speak personally with Catalant’s other Co-founder and Co-CEO Rob Biederman, who told us that the company has recently completed what he referred to as a “rebuild” of the platform with a new architecture to support a range of different business use cases for enterprises and expertise providers. Biederman said that the core marketplace business was well established and self-funding, and now the focus of attention and investment is on the enterprise transformation of work — something VCs are squarely behind, he said.

Biederman also told us that value-propositions are evolving, as clients see value in the platform less as direct cost reduction tool and more as a new talent management tool. While accessing hard-to-find expertise in flexible ways remains a strong value, companies are beginning to understand that retaining critical expertise is a problem. Biederman said that in many companies “people are bored — especially high performers.” A platform that enables top performers to work on different projects and essentially affect virtual vertical transfers “reduces churn and produces better outcomes — not just direct cost savings.”

“This future of work is real,” Biederman said. “Not next week or next quarter — but I really do believe that most companies that are thoughtful are taking very different approaches to thinking about talent. Unlike in the past, because of technology, companies have a choice now. They can either pretend that dynamic doesn’t exist, or they can think about alternative models.”

Spend Matters Perspective

Catalant is a unique player in a unique, diverse space, which continues to be fueled by large amounts of outside investment. In just the past few months in this hot online work platform space:

Clearly, investors certainly continue to have faith in the coming of the future of work, and they are trying to pick big winners. At the same time full-scale adoption of most “future of work” platforms has been gradual (though we at Spend Matters expect that is likely to change in coming years, as traction for some platforms — like Catalant and others — appears to be increasing).

While online marketplaces have tended to be the most common platform category in the space, more recently, a new category, which has more to do with how enterprises source and engage workforce and service, has begun to emerge. (See: Beyond VMS: The Creation of a New Technology Category for Contingent Workforce and Services.) The evolution of Catalant seems consistent with this trend.

In our recently published PRO Brief “Online Work Platforms and Enterprises: Survival of the Fittest or the Fastest?” we indicated that we have observed strategies/approaches that may contribute to platform viability and possibly more success with enterprises, and Catalant seems to exhibit most, if not all, of these.

While the future (including the future of work) is uncertain, Catalant’s trajectory appears currently to be a promising one. This is one of the reasons why Catalant earned a place on Spend Matters 50 to Watch list, and therefore should be one of the reasons for practitioners to watch Catalant.

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