BOSS direct hire updated prospectus: raising about $1 billion, valued at more than $8 billion

BOSS direct hire updated prospectus: raising about $1 billion, valued at more than $8 billion

The direct hire model is favored by the capital market

The prospectus shows that the company is expected to publicly issue 48 million American Depositary Shares (ADS) at a price range of $17-$19 per ADS, raising about $1 billion and valuing the company at more than $8 billion. In accordance with the usual practice, BOSS Direct has also granted the IPO underwriters an over-allotment option for up to 7.2 million ADSs.

The company’s fundraising will be used to increase investment in job search technology infrastructure and research, upgrade the technical capabilities of artificial intelligence and other related recruitment services; increase investment in new products and services to serve more regions and types of users.

Similar to many technology companies, BOSS Direct will implement a “same share, different rights” AB share structure, i.e., 1:1 voting rights for Class A shares and 1:15 voting rights for Class B. It is expected that after the completion of this round of fundraising, founder, Chairman and CEO Zhao Peng will account for 17.6% of shares and have 76.2% of voting rights.

The prospectus shows that the intended investors of the public offering include UBS AM, GIC, Mubadala, Sequoia, Tiger Global.

The entry of well-known investment institutions means that the global capital market and investors are highly optimistic about the fast-growing Chinese talent service market, the vast Chinese SME service market, and the new recruitment platform of BOSS Direct Recruitment and the direct recruitment model consisting of “mobile + intelligent matching + direct chat”.

Technology boom in recruitment industry

NASDAQ has now become the first choice for global innovative and technology companies to go public. It is home to major technology companies including Apple, Microsoft, Google, Amazon, etc. It also includes a series of new generation recruitment companies from the US such as ZipRecruiter and Israel’s Fiverr, which aim to change the inefficient experience of traditional recruitment.

In its prospectus, BOSS pointed out that SMEs and long-tail job seekers have long been denied access to proper job search and recruitment services. The company’s pioneering direct hire model has improved the efficiency of corporate recruitment and individual job search. The direct hire model is based on mobile and intelligent matching, allowing job seekers to chat directly with corporate users online.

Small and medium-sized enterprises are the main channel to absorb employment. Against the background of scattered SMEs, weak brands and low recruitment budgets, the direct hire model provides SME owners with active communication with job seekers, instant feedback and low-cost or even zero-cost recruitment services, providing a practical and effective solution to the social problem of SME recruitment. According to the prospectus data, as of March 31, 2021, 82.6% of the corporate users of BOSS direct recruitment services are SMEs.

On the job seeker side, as user privacy is increasingly important, BOSS supports job seekers to selectively hide information from corporate users; corporate users can only access job seeker contact information and full resume after job seekers confirm permission.

The direct recruitment model and business philosophy have enabled BOSS to achieve high growth ahead of its peers. The prospectus shows that in March 2021, the number of monthly active users (MAU) of BOSS Direct Hire reached 30.6 million. 2020 average MAU is 19.8 million, up 73.2% year-on-year from 2019 average MAU.

As of March 31, 2021, BOSS Direct Recruitment serves a total of 85.8 million certified job seekers, including white-collar users, gold-collar users, college students and blue-collar users; BOSS Direct Recruitment has a total of 13 million certified business-end users and serves 6.3 million certified companies.

According to CIC, BOSS has become the largest online recruitment platform in China in terms of MAUs. In terms of average mobile MAU growth in 2020, BOSS is the fastest growing of the top five online recruitment platforms in China.

CIC forecasts that China’s online recruitment market size is expected to increase from RMB 55.1 billion in 2020 to RMB 223.4 billion in 2025, with a CAGR of 32.3%, driven by the development of the new digital economy, favorable policies on innovation and entrepreneurship, and increased competition for corporate talent.

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