Sinequanon (SQN), the Zurich-based behavioral analytics firm, plans to raise USD$25 million in Series-B funding over the next 12 months to expand its digital products, which combine artificial intelligence, behavioral science and technology to provide a data-driven operating system for human capital management and large-scale behavior change.
The privately held firm, which has regional hubs in the Czech Republic and South Africa, plans to issue a USD$5 million convertible note in the second quarter followed by a USD$20 million equity placement in the first quarter of 2021. The convertible note is aimed at high net worth individuals, syndicates and family offices who will have the option of equity conversion or repayment upon maturity on 31 December 2022. SQN will raise the remaining USD$20 million by partnering with one or more institutions that have deep HR and technology expertise.
“The convertible note gives investors an opportunity to acquire an equity stake in SQN at a discount to its Series-B round, which is a compelling proposition for an offering that does for HR and consulting what lean did for manufacturing and agile did for software,” says Per Lagerstrom, Founder and CEO of SQN. “SQN delivers the equivalent of credit scoring for performance-relevant behaviors, providing business leaders with data on the workforce which has the same rigor as their financial information.”
SQN’s core platforms include its Twisit®, Living Analytics® and FlowOS® brands which provide a modern, pragmatic approach to culture change centered on the 51 key psychological constructs typically found in most organizations. By using its AI-driven culture and change management solutions, SQN is able to provide data-driven insights that enable organizations to map out a clear path to a unique Performance Signature®, the ideal cultural identity that is fit for purpose to achieve business objectives.
“We’re creating an entirely new category that integrates hard data with the human side of business and will fundamentally shift the HR Tech sector,” says Lagerstrom. “By leveraging the power of science and data we’re not only able to create a scalable operating system for human capital management, but also to enhance the day to day experiences of individuals and ultimately change their life trajectories for the better.”
The Swiss-based company plans to disrupt a human capital management market it estimates to be worth an annual USD$45 billion by tapping new revenue from sectors ranging from management consulting, education and learning, professional development and recruiting. Its Analytics as a Service business model offers attractive economic fundamentals providing for an expected gross margin of 84% with three times average recurring revenue (ARR) growth projected for the next 24 months.
SQN already enjoys a partnership with Egon Zehnder, one of the world’s largest executive search and talent management firms, which holds a 20% stake in the company following a USD$11 million equity investment in April 2019. This partnership has given SQN unparalleled access to a network of more than 1,000 CEOs and C-suite executives around the world, which it expects will help grow its annual revenue from USD$1.7 million last year to USD$5.4 million in 2020.
The HR Tech innovator has an exceptionally strong management team, having been founded by two former McKinsey executives with more than 25 years of collective experience in management consulting serving global companies spanning the financial services, technology, health, pharmaceuticals, basic materials, mining and FMCG sectors. SQN’s board also boasts two non-executive directors with world-class experience in deep tech, artificial intelligence and corporate executive experience.
“Our core differentiator is our ability to use hard data collection informed by solid behavioral science to bring about positive change to people’s lives,” says Lagerstrom. “By unlocking the human energy that is often trapped by antiquated HR systems we can direct people’s energy in a way that serves both the individuals as well as the business.”
SQN employs 70 people across multiple geographies with diverse skillsets ranging from behavioral, neural and data science, technology, education and client services.
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