Are you, as an entrepreneur, looking for a superstar hire to join your growing team? Regardless of your posts on various job boards and social media channels, there is a possibility that the perfect candidate for the opportunity may already be happily employed elsewhere. This is where a need to connect with passive talent assumes importance for companies, and a Dubai-based startup Visage has managed to raise US$420,000 (AED1.5 million) from Dubai Angel Investors and other UAE-based investors for its business idea combining crowdsourcing and artificial intelligence in a recruitment tool. Visage’s fundraising comes at a time when the startup is set to join the Alchemist Accelerator in San Francisco for a six-month program.
Launched in 2015 by co-founders Joss Leufrancois and Barry Potier, along with CTO Emmanuel Marboeuf, Visage’s client base includes startups such as The Luxury Closet, Careem and Fetchr, and UAE corporations such as Etisalat and Etihad, with the startup providing them a curated shortlist of “warm candidates ready to be interviewed. They [clients] work with us when they don’t get the results they want [by] advertising on job boards, and yet are not ready to pay a recruitment agency,” explains Leufrancois. “We execute our recruitment campaigns pretty much the same way as a marketing campaign.” The company uses a network of 1,000+ freelance recruiters and an AI platform to hunt for passive talent, which they claim make up almost 70% of the market. Clocking a monthly growth rate of 20%, Visage says that as a business model, the startup operates at almost “1/10th of the cost” of a recruitment agency.
The process by which Visage sealed the investment is reflective of the MENA funding scene, and also indicates the level of research undertaken by the startup. “We started by talking to VCs as they are the easiest to identify and get meetings with, [but] we realized late it wasn’t the way to go,” notes Leufrancois. “Middle East venture capitalists invest in laterstage startups, even if they claim doing early-stage. The startups they invest in are usually 3+ years old with significant traction.” Having bootstrapped for almost 18 months before this angel round, Leufrancois draws attention to using a convertible instrument (SAFE) for this round, and says that the team syndicated the deal themselves. “This instrument is supposed to avoid negotiating back and forth on the valuation,” he explains. Commenting on the deployment of the funds raised, Leufrancois says that the capital will be “used to progress on the artificial intelligence [component] of the platform” and for marketing efforts. “We are also launching in the US market,” he adds.
Joss Leufrancois, co-founder & CEO, Visage
What are a few attributes that you look for before finalizing a deal with an investor?
“I look for investors who understand the problem we are trying to solve. For us, that would be someone who knows how hard it is to recruit talent. I would then ascertain if they are smart money and can move quickly. Smart money won’t have an issue in understanding the principle of a convertible note, and why you’re using one. If they ask a more traditional equity deal or try to negotiate the agreement, tell them you’re happy to do that if they take 75% of the round. I also make sure they understand [that] the money needs to [be] wired the week after, otherwise they won’t be onboard. I found that investors who can comply with the above are extremely resourceful and will help you going forward.”
What are your views on MENA’s funding ecosystem? What are your pointers for aspiring entrepreneurs to successfully close funding rounds in the region?
“Raising money is tricky in MENA. There is just not enough VC money around and they make much less bets than in Europe or the US. The good thing is that MENA is full of wealthy individuals with cash to invest. They are used to the traditional form of investments like real estate. When I understood it wasn’t going to happen with MENA VCs, I reached out to my friends, clients, and angel investors in the ecosystem. The story was simple: ‘We are raising $140,000 to implement artificial intelligence on the platform. We have already $70,000 committed. We will close next week and the minimum ticket is $25,000.’ You need to create scarcity and urgency. You do that by having your round always 50% full and closing the following week. The worse enemies are the 'maybes.' Once you have more than 50%, you raise your funding target. You need to have your due diligence pack ready and send your SAFE [a convertible instrument] asking [investors] to sign and wire the money by next week otherwise you can’t guarantee their spot. This shows leadership and it works.”