Japanese HR firm Persol buys Singapore staffing platform Workmate

Singapore-based Workmate, an on-demand frontline staffing platform, has been acquired by Japanese-based HR conglomerate Persol Asia Pacific for an eight-figure US dollar sum.

After the deal, Workmate will run independently from Persol.

Workmate founder and CEO Matthew Ward told Tech in Asia that his startup chose to combine with Persol due to its reach, infrastructure, and knowledge spanning Asia. These resources fit into Ward’s plans for accelerated growth in new markets across the continent. He points out that with this growth, more cash will be needed to fund the firm’s working capital.

Photo credit: Workmate

The startup plans to launch in its home country of Singapore this month. It expects to expand into Malaysia by the first half of next year, followed by launches in Australia and New Zealand.

The HR tech firm currently has operations in Thailand and Indonesia, with nearly 500,000 pre-screened workers in its network.

Founded in 2016, Workmate acts as a digital contractor. Using its proprietary AI-powered algorithm, the platform matches pre-screened workers to companies.

The platform also provides an end-to-end service, complete with customer invoicing and payment processing to workers. It primarily staffs for corporations in the logistics warehousing, F&B, and hospitality sectors.

Persol Asia Pacific lies under Persol Holdings, an HR-focused firm that is listed on the Tokyo Stock Exchange. Last year, it managed to reap US$7.6 billion in sales. It has also led and co-led funding rounds for job board startup Glints.

Expanding to new markets means that Workmate needs to obtain multiple licenses to contract its staff across borders, another reason why it sold to Persol. The Japanese firm already has a presence in Hong Kong, Indonesia, Singapore, South Korea, the Philippines, Thailand, Malaysia, Vietnam, and Taiwan.

“For me, it’s about the amount of time, effort, and capital I have to raise to continue to grow independently, to set up offices and licenses. Or I can join forces with Persol.” Ward said. “It just enables us to accelerate more easily.”

Amid the funding winter and the growth needs of the firm, he also believes that the acquisition is the wiser choice compared to fundraising.

The precarious post-Covid landscape has made outsourcing firms such as Workmate more valuable. The company said its revenue nearly doubled in 2021 to US$22 million from US$12 million a year earlier.

Additionally, Ward said that its operations in Thailand and Indonesia are profitable. “The burn just comes from tech, product development, and regional investments we are doing in developing the platform,” he explained.