Flush with funds, Indian startups on hiring spree in a slowing economy

Bike rental startup Vogo plans to more than double the number of employees by the end of next year, unfazed by the consumption slowdown in India that has brought makers of cars to consumer goods to their knees.

Bengaluru-based Vogo’s chief executive, Anand Ayyadurai, wants to expand his team to 1,000 by the end of 2020 from 400 now, after growing the startup’s employee strength 20-fold over about 12 months.

“We plan to invest very significantly in this (people) now, as it is about capability building. A temporary slowdown in India does not necessarily impact the startup economy because the bets these guys (tech startups) are taking are 5-10 years long,” he said.

Vogo is not the only startup on a hiring spree. With fund inflow into tech startups continuing at a brisk pace, startup hiring may not be immediately affected due to the current economic slowdown in India, according to several startup founders and analysts.

According to professional social networking site LinkedIn, 25 companies on its 2019 list of top startups in India collectively created around 18,000 jobs in the past year and are expected to create more than 19,000 new opportunities over the next 12 months. Hospitality startup Oyo, health and fitness startup Cure.Fit and online consultation platform TapChief occupied the top three spots. Nearly 50% of the firms on the list are based in Bengaluru.

Analysts and headhunters tracking startups say that roles in demand include full-stack developers with knowledge of both front- and back-end programming, digital marketers, data scientists and IoT (Internet of Things) hardware developers.

Atit Danak, manager and head of CoNXT, consulting firm Zinnov’s startup collaboration practice, said around 5,000 startups are hiring for full-time senior engineering and business roles. Based on their research, these companies are likely to hire three-four people and in some cases 10-20, depending on funding. “There are 15,000-20,000 open positions now,” he said.

While expertise in analytics, AI/ML (artificial intelligence/machine learning) and IoT continue to be in demand, full-stack developers are the most in demand at present. “It is difficult to hire developers with four-seven years of experience as there is no dearth of options for them,” he said.

Commenting on hiring trends in 2019, compared to those of previous years, Danak said that in 2018-19, “systematic funding was back and there is an increase in the demand side. However, companies are also making pragmatic hiring choices and we expect the trend to continue”.

K.S. Viswanathan, vice president for industry initiatives at software industry body Nasscom, said he “does not see any tension” with respect to hiring. “In the short to mid-term, IT (information technology) seems to be robust. This is the time enterprises globally are picking up solutions that are transformational, and people are leveraging more and more startup capacity. The number of online transactions is increasing, the amount of data generated is increasing and all this augurs well for the startup community.” Startups are likely to hire for “average of 4.2- 5 job roles”, he said, more in core engineering roles.

Anshuman Das, managing partner at Longhouse Consulting, says there is an uptick in tech talent across mobility and software as a service (SaaS) startups. “On an average, roughly any SaaS company that has raised a Series B and beyond is a team of roughly 100 people. And typically, there would be at least 30-40 companies of this type in the SaaS space. In mobility alone, there are 15-20 companies, with most of them adding another 100 employees each.

“So, across both mobility and SaaS, tech job availability would be around 5,000-7,000. And separately, if you look at the entire Indian startup space, that itself is generating around 45,000-50,000 jobs in the tech segment alone.”

He added that most SaaS startups “target employees in MNCs like Adobe, Infosys, Amazon, Microsoft—most of them have B2B (business to business) experienced talent. Even e-commerce firms like Amazon have a lot of B2B-centric teams in supply chain, database management, warehousing, etc.; a lot of these firms are also B2B-centric”.

Guvi, an IIT Madras-incubated startup, is an online technical learning platform that offers video courses in vernacular languages. While there was a lot of buzz around AI/ML last year, Arunprakash M., chief technology officer at Guvi, said companies are actually starting to hire for these skills this year.

“Product companies and startups are hiring as usual. They are happy now because in terms of funding and stability, they get better numbers right now. We are seeing more demand,” he said.

However, expectations from startups are very high compared to traditional IT services firms, which tend to hire 500-600 people. “Product companies take 5-10 people, but they expect good quality people. And now, they are ready to pay more as well,” he said. Well-funded startups can hire even 50-60 people. He added that there is high demand for full-stack developers, expertise in digital marketing, AI/ML, not just in India but also from banks in West Asia, Malaysia, Singapore, Vietnam and Hong Kong that are looking to hire from India.

The article was first reported on Livemint.com