Hacking global expansion through M&A

The story of Job&Talent is really a tale of two companies. The first was an online job board in the style of Indeed or Monster. It came into existence after Urdiales’ first entrepreneurial venture, an ecommerce startup, shut down amid the 2008 financial crisis. “The experience left me realizing how broken the labor market was,” Urdiales says. For his part, Navío had spent two years at McKinsey but felt similar frustrations as a job seeker. “I really hated the job-finding system,” Navío says. The two were introduced by a mutual friend who knew each was interested in starting a company.

“We were looking at the same problem from two different angles in the marketplace and coming to the same conclusion: it could be done better,” Navío says. Job&Talent was born in Urdiales’s living room in Madrid. Both founders had finance backgrounds and were well-connected in the local startup scene, and they quickly landed €250,000 in pre-seed money. The two decided to be co-CEOs with Urdiales handling the outside-facing tasks (fundraising, sales, finance) and Navío tackling operations and other inside-facing functions. 

Job&Talent was not the first online job board in Spain, but it sped past rivals thanks to a more sophisticated system for matching candidates and positions. “The idea was that instead of you spending thousands of hours to find a job, that job will find you,” Navío says.

By 2011, the business was successful enough that the pair began thinking about a market that would let them test their model outside of Spain. After much debate, they chose to open a second office in London.

“We knew it was going to be much harder to start in the U.K. than in Portugal or even in some Latin American countries,” Urdiales says. But the U.K. was Europe’s largest market and London the city that every Silicon Valley-based startup seemed to go to when seeking to plant its flag outside the U.S. Eventually, they also established job boards in both Colombia and Mexico.

But Urdiales and Navío, who had started Job&Talent to help workers thrive, found themselves frustrated despite the company’s momentum. “We didn’t know what happened after a person was connected to a possible role,” Navío says. “Were they hired? Was it a good job with a good employer? Did they find a more stable job?” The employers who used their service also felt frustrated. “We were making it a bit easier for them to find people, but we weren’t solving all the pain points of hiring a person,” Urdiales says. Employers wanted help finding better and more motivated employees, as well as help with onboarding and managing relationships with the workers. Urdiales and Navío agreed they needed to evolve their product. 

A trip to San Francisco in search of more venture funding in 2015 sowed the seeds for Job&Talent 2.0. Prospective investors told them, “What you’re doing is not different enough,” Navío recalls. The two had to admit that the VCs were right. “At the end of the day, we were 10 percent better than Monster, but we weren’t going to be 10x better,” Navío says.

On the long plane ride back to Madrid, they hatched a plan for a new and improved Job&Talent. “The two of us were awake all night brainstorming the new company,” Navío says. Nearly 9 in every 10 jobs on their board were posted by warehouses, retailers, and others looking for temporary workers. And yet, most of the talent marketplaces that had emerged on both sides of the Atlantic catered to those looking for white-collar employees. 

Urdiales and Navío decided to reinvent Job&Talent as an app-based job placement platform focused on blue-collar and temp work, which the company calls “essential workers.” Job&Talent would vet potential employees and take care of everything from onboarding to shift management to payment for their work. Workers and employers alike could rate each other and provide feedback based on their experiences. “These are the people that make our world go around,” Urdiales says about essential workers. “We all realized, especially during the pandemic, that they are absolutely crucial. And yet, it’s a segment of the workforce that’s been under-invested in.”

Critically, they also decided to forgo independent contractors and instead bring on every worker as an employee, though that meant extra paperwork and additional costs. “Everyone was telling us, the workers prefer the independent contractor model. But we were spending time with them, and we knew they preferred to work under a proper labor contract,” Urdiales says. Happier workers, ones with proper employment protection and benefits, they figured, would mean better, more reliable workers, and therefore satisfied clients.

A more cautious pair would have stuck to their original business while experimenting with their new idea on the side. The job board business had 2 million active users in four countries and was generating €6 million in annual revenue. But Urdiales and Navío decided to kill the job board business just a month after launching their new online platform in March 2016. They feared that their fealty to an ongoing, revenue-producing business would stand in the way of their efforts to build a new one.  “We needed to burn the bridge if we really wanted to innovate,” Navío says. 

Revenue dropped to zero. But by year’s end, the new app had brought in more than €5 million of business. “The business really exploded in the first half of 2017,” Urdiales says. The company booked nearly €50 million in revenue that year. It was time to seek out more markets.

Expanding their job board business to new countries had proved relatively easy. Doing so with a staffing business that had to onboard employees would prove far more complex — especially because Job&Talent’s initial approach lacked focus and strategy. 

“In the beginning, we expanded internationally by following clients,” Navío says. A company that was happy with their service in Spain was having trouble finding employees in the Nordic countries, and so Job&Talent opened an outpost in Sweden. To help another large customer, Job&Talent moved into Germany, where stringent, employee-friendly rules made it “by far the toughest market that we have ever operated in,” Urdiales says.

“At some point, we realized we should be a little more strategic about going into a new place,” Navío says. The company began looking at three main factors when evaluating a new country: the size of the market; the complexity of its labor laws; and the country’s unemployment rate. (The lower the rate, the scarcer the supply of labor, and the higher the fee Job&Talent could charge an employer.) Once they picked a new market, headquarters would send a small tactical launch team that followed a game plan that Urdiales and Navío developed over the years. 

Even so, organic growth proved difficult. Despite its success in Spain, Job&Talent was relatively unknown in new markets, and big employers were wary of outsourcing their staffing needs to the company. That’s when the company decided to lean on M&A as the path to international growth. 

“What we learned over time is that launching organically in a new country was extremely slow,” says Ana Sastre, the company’s chief finance operations officer. “You need to have a track record, and you need to win a client’s trust in order for them to engage with you as a workforce provider.” Buying a local employment agency with at least a few brand-name clients could help Job&Talent’s sales team clinch deals with other large employers in a country. “With M&A, we realized we could hack it and build much faster,” Sastre says. 

These days, the former Merrill Lynch investment banker heads up a Job&Talent M&A squad that evaluates possible target companies in a new country following a set of clear criteria. The first is to avoid companies beset by challenges, no matter how attractive the price. “We have found out that the reason they’re stressed is a lot of their clients are not satisfied,” Urdiales says. They also avoid companies with what he described as a “massive long tail,” or lots of small clients, as well as those that rely on one or two large clients. The ideal target has 10 to 20 clients that account for roughly 80 percent of its business. 

As Job&Talent moved into the U.S. market in 2021, it created a repeatable approach to M&A that developed into a playbook not only for acquiring companies but also for integrating them. “It allowed us to get legacy companies into our technology operating model and capture significant synergies,” says Diego de Haro, the CEO of Job&Talent’s U.S. operations. “We learned the importance of spending time with clients of the acquired companies to highlight our unique vision, how it sets us apart from traditional players, and the added value it will bring them in the medium and long term.”

While CEOs and founders proved replaceable, the larger management teams of the acquired companies proved critical in helping Job&Talent succeed. Urdiales says he learned that lesson after dismissing some management teams too early. “It caused us to lose some clients and business,” he says, “and made us struggle to understand what was happening in the companies we acquired.”  

Like at many other fast-growing companies, working intentionally to imprint Job&Talent’s corporate culture, values, and brand across its network also became a critical part of the integration process. Christof Schminke, a former McKinsey consultant and expert in brand building, was brought in to lead that effort. By then, Job&Talent was a billion-dollar company spanning three continents, yet its brand was unknown, in part because many of the acquired companies still operated under their legacy names. In record time, Schminke worked to align the company and each of the national divisions under the Job&Talent brand, with a simple, cohesive message: “Work, made easy.”   

“The speed and excellence with which we executed the brand transition across the company earned us significant credibility and transformed initial resistance into enthusiastic support,” Schminke says. “Today, we operate under a unified Job&Talent brand recognized globally as a digital disruptor that delivers cutting-edge technology to clients and workers. It’s really helped promote brand awareness and recognition.”