Xref Limited

ASX:XF1

Xref Limited

ASX:XF1
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$0.215 (+1.2%)
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#226
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6
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Forum Topics XF1 XF1 XF1 - Reference Checking Competitors and thoughts
Hackofalltrades
Added 3 years ago

This seems very much like a winner take all industry - at least between different countries. This kind of service is extremely useful for an employer, saves times, and has massive network effects due if all references are collected in one spot. There also seems like the potential for value adding once you are established. There also seem to be a few companies providing this kind of service in real estate for rentals.

Does anyone know much about the competition here? I feel like if I was to invest in Xref, I'd want to know exactly what all the competition is and what they do.

In terms of how useful reference checks are to businesses, they seem to fit into two spaces.

  • Box ticking and butt covering so you can say you did due diligence.
  • Screening out fake details in resumes.
  • Genuinely useful to work out who someone is, however, this is only the case if you can find someone who will speak candidly. Sometimes a provided reference can do this, but contacting someone the person knows who they haven't listed to ask them about the applicant is far better.


Given that this is formalising the process, I feel like it is very good for the box ticking and butt covering, decent at the screening, but I am not convinced it will be good for actually working out what who the person is and whether they will actually be useful. Essentially, if it is formalised, the applicant may have legal rights to see what is said about them, which may make xref hesitant to hold negative references. It is really the candid and especially negative references that are the most useful.

I sometimes get asked to do references for people - I was asked by referoo the other day. Most of these seem to just do text references.


Referoo - https://www.referoo.com.au/

A quick google also found these sites

https://backycheck.com.au/reference-check.html#:~:text=Reference checks are agreed by,applicant worked for your company

https://cvcheck.com/employment-reference-check/?gclid=CjwKCAiA4veMBhAMEiwAU4XRr8ppRVWxbBCDzB0TjS_iTyFDvPCWjx_AaN8ARVjQce1pkl7dy5pAkxoC_4QQAvD_BwE&gclid=CjwKCAiA4veMBhAMEiwAU4XRr8ppRVWxbBCDzB0TjS_iTyFDvPCWjx_AaN8ARVjQce1pkl7dy5pAkxoC_4QQAvD_BwE

https://www.veremark.com/ - https://pitchbook.com/profiles/company/403984-27#overview

https://vidcruiter.com/

11
Noddy74
Added 3 years ago

Hey Stuey,

You can add these to your list of competitors:

SkillSurvey Reference

Checkster

Crosschq

Checkmate

In fact 'Reference Check Software' is a discrete category on G2 and Capterra. But competition signals strong demand and validation of what you are doing. The tech isn't all that techy and in this instance isn't the moat. On the review websites all the top solutions get similar high ratings, but XRef has the most reviews and that points at what the moat actually is - scale. There was another indication as to how scale is working to their advantage this week when they announced an integration agreement with First Advantage. First Advantage aren't operating out of their mother's basement. They're a NASDAQ-listed fast growing AUD$1B revenue, highly profitable candidate screening business. I don't think XRef is necessarily cutting their lunch at the moment because the product seems complementary. But I do think that if they wanted to they could replicate what XRef offers within weeks (certainly months). So why would they choose to partner with XRef? I think the answer is scale - they each get to cross sell to each other's client base and that's worth more to First Advantage than trying to replicate.

Some of the competition listed (like CV Check - who incidentally also have a partnership agreement with XRef) provide automated reference checking as an ancillary offering to the core business, which is background checking e.g. Police checks, WWC checks, bankruptcy checks etc. I'm glad this isn't a route XRef has gone down. It's much harder to scale when you have to build integrations with databases of authorities and government agencies all over the world. It's also a lot more capital intensive, increases ongoing costs and introduces more risk in terms of privacy etc. Instead of going down that path XRef are looking to branch out into other areas, including Pulse Checks and Exit Surveys.

I think you're right to point out it's not a solution for every scenario. I'm guessing XRef hasn't been used too often as the basis for recruiting the CEO...nor their direct reports...probably not their reports either. Fortunately that still leaves the majority of the work force it may be used for. You may be even more cynical than I in describing it as a butt covering tool. At then end of the day I don't think it matters as long as it's an effective butt covering tool!

I could look pretty silly by the end of today as XRef have their AGM this afternoon. Ominously it's booked in at 4.30 on a Friday, which is traditionally the taking out the trash timeslot. But I'm looking forward to this one and hopefully getting a positive update on how the business is tracking...we'll see...

[I hold XRef but not CV Check (ASX:CV1) or First Advantage (NASDAQ:FA)]


13
Hackofalltrades
Added 3 years ago

That's fantastic thanks Noddy.

I might try and have a deeper look at sometime. Might rewatch your pitch too!

10