Current Shares Out10.0
Post Offering Valuation15.0
Post Offering Shares Out
Overview and HistoryEDIT
Employees are an organization’s most important assets, and a key source of long-term competitive advantage. Companies that fail to build and invest in the best workforce jeopardize their own success and even survival. Organizations that understand this want to hire the best, most qualified individuals every time using the most efficient process available.
Our business, IKM Holdings, Inc., (“IKM” or the “Company”) was formed to address the global demand for skills measurement and assessment, enabling organizations with a real-time assessment platform that we believe is the gold standard to workforce management, creating value for our customers by reducing:
The hiring process time by 55%;
Staff attrition by 15%;
Assessment development time by 95%; and
Training costs by 22%.
A recent survey by Robert Half showed that one-third (36%) of 1,400 executives surveyed felt the top factor leading to a failed hire, aside from performance issues, is a poor skills match. A 2013 CareerBuilder Survey quantified the cost of a bad hire, reporting that 41% of companies surveyed say that a bad hire in the last year cost them at least $25,000 and 25% of companies surveyed say that a bad hire in the last year has cost them at least $50,000.
Contrast the expense of making a bad hire to the average investment of $6,200 that IKM customers make to mitigate this risk. In addition, IKM customers use its skills testing platform to provide specific training and certification that optimizes employee productivity.
Through our wholly-owned subsidiaries, TeckChek Inc., TeckChek Europe LTD, TeckChek Australasia PTY LTD, and TeckChek Africa PTY LTD we provide businesses worldwide with a broad range of assessments for employee testing and pre-employment testing, including pre-hire assessments for employment screening, training assessments for pre-training and post-training testing and certification programs.
IKM Clients includes: Citigroup, Global Markets Hays, HSBC Group, Manpower / Elan, Fiserv, Barclays Bank, Macquarie Bank, Tata Consulting Services, HCL Technologies, Walmart, Randstad Technologies, Morgan Stanley, MindTree, South Africa Post Office, Standard Bank, UNICEF, Thomson Reuters, Inflow and AssetHealth.
Pre-Hire Assessments assist in streamlining the talent acquisition process, reducing the candidate pool to a manageable size and ensuring the final candidates are a good fit for the organization’s needs.
Skills measurement and assessment is unique in the HCM ecosystem in that it is a highly specialized, scientific process which is created and curated by experts. It requires continual development and refinement which is data intensive.
Skills measurement technologies are relevant throughout the workforce management value chain, as a pre-hire predictive tool (acquisition) as well as a post-hire tool to support planning, development and succession planning (management).
The estimated market size which includes both pre-hire and skills measurement is approximately $3 billion, with the pre-hire segment representing about $1.25 billion. We believe that the acquisition, pre-hire subset to skills measurement sub-section of the human capital management market will continue to experience high-growth.
From a competitive standpoint, the market is highly fragmented and is consolidating, characterized by lack of standardization, variations in methodologies, and the relatively broad deployment of technologies throughout the workforce management value chain.
Competitors include: Findly, Brainbench, Criteria Corp, eSkill, HankerRank, HireVue, HR Avatar, Kattis, Optimize, PeopleFacts, Prometic, Selective Hiring, Technically Compatible, and Wonscore. The SaaS nature of our business model provides us with the economics to compete on price, but we believe our value proposition enables us to maintain premium pricing in the marketplace.
Our Solution & Value PropositionEDIT
IKM’s primary differentiation in the market is the adaptive testing methodology at the core of the majority of its library, which is the most thorough way to evaluate candidate or employee knowledge for better workforce management.
Adaptive testing starts with a large pool of questions and then selects individual questions for test takers, depending on their responses as they go along. As the test taker does less well, the questions become less difficult. The result is a much more robust, multi-dimensional and comprehensive profile than standard linear testing profiles.
Adaptive cases are as accurate as fixed-form (linear) tests that are twice as long. This enables the assessment to have fewer questions and to take less time while still providing good information about student achievement.
Studies reveal that adaptive tests drawing from large item pools can provide much more information, and more precise information, than linear tests do.
Because they are administered on a computer, adaptive tests provide immediate feedback.
There is no other skills assessment solution in the market place that can match IKM’s assessment methodology, result integrity and flexibility.
IKM uniquely applies its adaptive testing independently within the sub-skills, which allows each sub-skill to be independently analyzed and objectively classified as a strength or weakness. This is the most accurate and detailed way to identify strengths, weaknesses or proficiencies for prospective employment candidates.
Very few other testing solutions offer sub-skill designations and those that do, do not employ the adaptive method independently within each sub-skill, which means that sub-skills are scored as “best” or “worst” comparatively as a relative measure, rather than a multi-dimensional, empirical measure of the individual’s skill-level.
In addition, IKM assessment tests provide a multiple-correct response format. Each question has five possible answers, of which up to three may be correct – for up to 25 different answer combinations, enabling a much deeper, more comprehensive profile and evaluation of the individual’s strengths and weaknesses.
Our assessment platform provides ‘best-in-class’ insight into test takers’ performance enabling organizations with the detailed, comprehensive and accurate analysis necessary to maximizing workforce management. The majority of skills assessment solutions in the market today are linear, proving results for a single, overall percentage or score. IKM’s Proficiency Profile is a comprehensive analysis of the individual’s knowledge.
We operate a Software-as-a-Service (SaaS) business model. Our platform is fully developed, and widely adopted, although we will continue to invest in our technology in areas that we believe will extend our competitive advantage in the marketplace (see “Growth Strategy” below). The nature of our business enables us to more efficiently scale our revenues while managing our operating expenses:
Better Control Over Operating Expenses in SaaS Model – Pro Forma Example
IKM has recently restructured its business and operations, led by Jordy Spiegel, its new CEO and Co- Chairman and Bill Mundell, its Co-Chairman - to position the business to more adeptly compete and scale its operations in the burgeoning $3 billion global skills assessment market.
We have high visibility over operating expenses and believe that moderate investments in operations will enable us to ramp our sales growth substantially.
Prior to the current management team’s acquisition of the business, little to no capital investment was made into areas targeted for growth.
We believe there is a tremendous opportunity, with a focused sales and marketing strategy, to accelerate our sales to achieve a long term organic growth trajectory of roughly 40% - and strategic tuck-in acquisitions will be additive to our organic growth.
Historically, sales have been highly tailored to customer requirements, resulting in a broad range of pricing established based on negotiations and perceived opportunity. We are implementing a tiered pricing model designed to accommodate the specific needs of our customers while creating a more scalable and efficient sales model.
Sales and Marketing StrategyEDIT
The sales cycle for skills measurement technologies is typically 3-9 months. While we will continue to deepen our sales funnel through the cycle to converted sales, based on existing leverage in our business model, we believe there are several opportunities to accelerate our sales while expanding our reach:
Customer Expansion. We serve more than 450 customers worldwide which translates into an average annual customer sales contribution of $6,260 across our business. We believe there is a tremendous opportunity to expand sales to existing customers through a concerted marketing and sales effort. An increase in average annual sales per customer to $10,000 would result in an additional $1.6 million in annual sales.
Accelerating Our Sales Effort in Existing Markets. We intend to invest into adding sales personnel in key markets, in addition to building and executing a more effective and impactful sales and marketing effort.
Content Expansion. We continue to build our library, adding more than 100 assessment tests annually, and intend to convert high-demand content, presently available only in adaptive technology formats, to linear formats, which will create a lower-price point for organizations with specific requirements. We are also working on licensing a ‘software coding’ content product line with a business partner.
Geographic Expansion. We are developing business opportunities in China and India. McKinsey estimates that Chinese employers will demand 140 million college-educated workers by 2020, or about 23 million more than it will be able to supply. We expect that a significant demand will come in high-skill sectors including IT.
Vertical Expansion. We have a proprietary testing platform that is suitable for any knowledge- based content. To date, we have focused primarily on the information technology markets. However, we believe that there is a significant opportunity to expand our sales and marketing efforts into other markets, including accounting attitude/aptitude, call center, healthcare, industrial, sales, staffing and soft skills measurement solutions.
Reseller Expansion/Platform. Our two largest customers are reseller organizations. We are working with Inflow, which sells IKM solutions into the India market, to expand their effort which is contingent primarily on our ability to demonstrate to Inflow that we can support higher volumes. AssetHealth uses our platform to create a series of healthcare related questions, where they built the content and IKM is the “IntelInside”, and we have licensed our technology platform to them.