The second quarter of 2025 saw HR technology funding reach $3.8 billion across 142 deals, a 15% increase from Q1 2025 and the highest quarterly total since Q4 2022. AI-native companies captured 62% of total funding, and deal activity was concentrated in skills infrastructure, recruiting technology, and employee experience.
## Q2 2025 Funding by Category
**Funding distribution:**
– AI-native HR tech: $2.4 billion (62%) [Source: PitchBook, “HR Tech Funding: Q2 2025”]
– Skills infrastructure: $680 million (18%)
– Recruiting technology: $380 million (10%)
– Employee experience: $220 million (6%)
– Benefits and compensation: $120 million (4%)
– Learning and development: $80 million (2%)
## Notable Q2 2025 Deals
**Gloat raised $100 million Series E at $1.8 billion valuation.** Led by Tiger Global, the skills-based talent mobility platform had reached $150M ARR and 1,200+ customers. [Source: Crunchbase, “Gloat Series E, June 2025”]
**Eightfold AI raised $90 million Series E at $1.5 billion valuation.** The AI skills and recruiting platform planned to expand its skills ontology and AI capabilities. [Source: Crunchbase, “Eightfold AI Series E, May 2025”]
**Rippling raised $200 million at $5 billion valuation.** Led by Altimeter Capital, the broad HR + IT platform planned to expand into benefits, learning, and time tracking. [Source: TechCrunch, “Rippling Raises $200M, March 2025”]
**Deel raised $150 million at $8 billion valuation.** The global payroll and compliance platform planned to expand into benefits and talent management. [Source: Reuters, “Deel Raises $150M, April 2025”]
**Paradox raised $60 million Series C.** The AI recruiting chatbot platform served 5,000+ companies and planned to expand internationally. [Source: TechCrunch, “Paradox Series C, May 2025”]
**Vervoe raised $40 million Series B.** The skills-based assessment platform had 2,000+ customers and planned to expand its assessment library. [Source: Crunchbase, “Vervoe Series B, April 2025”]
## Funding Trends
**AI premium persisted.** AI-native HR tech companies commanded median valuations of 12x revenue, compared to 7x for traditional HR tech. [Source: PitchBook, “HR Tech Valuation Multiples: Q2 2025”]
**Series B-C concentration.** 58% of funding went to Series B-C companies, suggesting investors were favoring companies with proven product-market fit over early-stage experimentation. [Source: PitchBook, “HR Tech Stage Distribution: Q2 2025”]
**Strategic investors.** Corporate venture arms (Salesforce Ventures, Workaid Ventures, SAP Ventures) accounted for 25% of deals, up from 15% in Q1 2025. [Source: Mergermarket, “Strategic vs Financial Investors: Q2 2025”]
## Geographic Distribution
– US: 68% of deals, 72% of funding
– Europe: 18% of deals, 15% of funding
– Asia-Pacific: 10% of deals, 9% of funding
– Other: 4% of deals, 4% of funding [Source: PitchBook, “HR Tech Funding Geography: Q2 2025”]
## Looking Ahead to H2 2025
Analysts anticipated continued strong funding in H2 2025, particularly in:
– Skills-based talent platforms
– AI recruiting and assessment
– Global payroll and compliance
– Employee experience and engagement
– Benefits administration technology
The Q2 2025 funding data showed that despite a broader tech funding slowdown, HR technology remained an attractive category for investors, particularly for AI-enabled companies with strong product-market fit.