Ceridian has reached a definitive agreement to acquire Toronto hiring and employee management software startup Ideal. The transaction is expected to close tomorrow, on April 30. Both companies declined to disclose the financial terms of the deal.
Once the acquisition is complete, Ceridian intends to integrate Ideal into its Dayforce platform in order to “optimize” the company’s talent management offering. Ideal’s artificial intelligence (AI)-powered system aims to enhance human resources software in order to help teams make more accurate, efficient, and fair talent-related decisions. Ceridian is a Toronto and Minneapolis-based human resources (HR) software company.
For Ideal’s co-founders, Somen Mondal and Shaun Ricci, the deal is set to become their second successful tech exit in less than 10 years.
After partnering with Ceridian for about two years, Ideal is set to become part of Ceridian as the startup looks to expand its reach and accelerate its product roadmap “with increased resources.” According to Shaun Ricci, Ideal’s COO and co-founder, the company has already built a “great relationship” with Ceridian’s team and leadership.
“We think it’s a huge win for Toronto and the Canadian tech ecosystem,” Somen Mondal, Ideal’s co-founder and CEO, told BetaKit. “Essentially, two Canadian companies are joining forces. There aren’t that many Canadian tech companies that operate at the scale that Ceridian does. Our product and team will greatly benefit from being able to work at this scale.”
Mondal added that the move is also “a great fit from a product standpoint,” given that it will allow Ideal to apply its machine learning and AI capabilities to Ceridian’s “massive amount of end-to-end HR data,” which he said will allow the startup to expand its product and differentiate Ceridian and Dayforce in the marketplace.
According to Ricci, during the past three years, Ideal has experienced 100 percent year-over-year growth. The startup’s software automates administrative tasks, screens and matches talent, and provides data-driven insights on diversity, equity, and inclusion.
Mondal and Ricci co-founded Ideal in 2014. The deal is set to become their second successful tech exit in less than 10 years, after the two sold their previous company, Toronto-based enterprise security software startup Field ID, to Master Lock in 2013 for an undisclosed amount.
“With the global scale of Ceridian’s modern human capital management platform, we can now apply our technology to the entire talent lifecycle, from application to retirement,” wrote Ricci. Access to Ceridian’s customers, he said, will help Ideal bring equity and fairness practices to more hiring decisions.
As part of the deal, Ideal’s 32-person team is set to remain in Toronto. Under the Ceridian umbrella, Ideal will aim to contribute to machine learning and AI initiatives at the company.
Toronto tech investor Michael Hyatt, Ideal’s first investor, told BetaKit he was “thrilled” with the deal, which he referred to as “a complete AI acquisition.”
“This was a very smart investment from Ceridian, who wanted to make a jump in AI,” said Hyatt. For Ideal, he added, Ceridian “brings an incredible reach.”
“Ceridian had been using [Ideal’s] technology and found it to be fantastic, so they acquired the business,” said Hyatt. “It was a very logical acquisition, because they already knew how great it was.”
In 2017, Ideal raised a $3 million seed round led by former CEO and former group head of Scotiabank’s global banking and markets division Mike Durland, BlueCat founders Michael Hyatt and Richard Hyatt, and the MaRS Investment Accelerator Fund. In 2015, Ideal raised $2.5 million in funding.
“At Ideal, we are passionate about providing our customers with powerful, actionable workforce insights to drive fair, accurate, and equitable decision making and help them achieve long-term organizational success,” said Mondal.
In today’s global labour market, Ceridian said, attracting top talent can be difficult, especially given “rapidly changing recruitment needs,” and tech can make this process easier. In February 2020, Ceridian announced plans to hire 2,000 new employees across Canada over the next five years.
Photo of Ideal co-founders, COO Shaun Ricci and CEO Somen Mondal, courtesy of Ideal