Recruiting tool start-up Zao raises $1.3M in funding

Israeli-based Zao enables companies to tap expedite the hiring process through referrals

It's hard to find quality workers. In fact, it's probably one of the toughest jobs - recruiting. Many times the best employee is found through referrals. But the process of gettting referrals can be daunting. 

That's where Zao, founded in 2011, comes in. The Israeli-based start-up helps employers manage referral programs and hire quality staff. The company announced Friday that it's raised $1.3 million in funding from Oren Zeev, founding partner at Orens Capital and former General Partner at Apax Partners.

The idea came to Zao CEO and founder Ziv Eliraz at his prior positions, which required him to hire. "I tried third-party agencies, which were expensive and job boards, etc," Eliraz explained. "Then the epiphany came out of desperation. The No. 1 source of hires is referrals, but there aren't platforms that manage that referral process."

So how does Zao work?

"Zao is built around creating a smart referral process leveraging social media," said Eliraz.

The service focuses on three things: 1) Referral rewards - (allowing employees to split reward with friends - motivating people around the company to help hire) 2) Smart matching technology - (Zao will look through a referrer's Facebook and LinkedIn network to surface up quality leads) 3) Gamification (adding a layer which shows which employees are active in bringing in leads.) 

Sounds like a good hiring school. Zao doesn't get paid until the company has made a hire. The service costs 30% of the bounty the hirer sets. So if you offer up a bounty of $1000 to find a recruit, Zao takes 30% or $300.

Zao has been in beta since April. It has more than 30 companies actively using the system from big corporations to small start-ups. Eliraz would not disclose how many referrals or hires have been made on the platform.