Indian cloud-based HR solutions firm Darwinbox, that focuses on the entire Southeast Asian region, has raised as much as $15 million in a Series B round, led by marquee venture capitalist Sequoia India.
The round also saw the participation of the startup’s existing investors Lightspeed India Partners, Endiya Partners and 3one4 Capital.
Operating in the same space as traditional tech giants such as SAP, Oracle and Workday, Darwinbox takes care of an organisation’s HR needs across the entire employee life cycle including recruitment, onboarding and core transactions pertaining to leaves and attendance, among others.
What’s more, the startup also manages an organisation’s payroll, employee engagement and performance management, besides dealing with people analytics.
“Talent is core to the success of any business,” said Jayant Paleti, Co-founder, Darwinbox. “Our mission has been to build a human capital management system, that puts employees squarely at the centre and enables organisations to engage, empower and elevate the potential of their workforce.”
Paleti, along Chaitanya Peddi and Rohit Chennamaneni – all first-generation entrepreneurs – founded Darwinbox in Hyderabad in 2015. A year later, the company raised its seed round in June 2016 from early-stage venture capital firm Endiya Partners, and T.V. Mohandas Pai-backed venture firm 3one4 Capital.
For the uninitiated, Pai is a former senior executive of IT bellwether Infosys.
Subsequently, in June 2017, Darwinbox raised its Series A round, led by Lightspeed India Partners, a firm that focuses on boosting disruptive innovations in consumer and enterprise in India. The round had also seen the participation of its earlier investors.
The current investment round brings the total funding for Darwinbox to close to $20 million. To break down the numbers further, the company has raised as much as $4 million in its Series A round and another $5,00,000 as seed capital.
Most of the corpus raised will help Darwinbox foray into markets such as Malaysia, Vietnam and the Philippines and ramp up its team in these regions. However, a part of it will also be used to beef up its research to leverage deep-technologies like AI and ML to aid organisations in their decision-making process.
Currently, in Southeast Asia, the startup is present in two countries – Singapore and Indonesia. It entered both these markets earlier this year.
Southeast Asia has been an important market for the company. “From day one, Darwinbox has been built keeping in mind the needs of large enterprises in Asia,” said Chennamaneni.
Take Indonesia, for instance. “As a geography, it is closest to what we have seen in India and has a dominant share of the country’s workforce present in sectors that we have solved for,” he added.
Darwinbox offers its services to an array of sectors such as IT, manufacturing, BFSI, pharma, healthcare, consumer products and retail.
The company has a “unique understanding of local nuances in HR in Asia to provide a compelling and delightful product to their customers,” said Harshjit Sethi, principal at Sequoia Capital India.
Back home, in India, Darwinbox is currently present in six locations namely Delhi, Mumbai, Bangalore, Chennai and Ahmedabad, apart from its headquarters – Hyderabad.
Today, its customers range from multi-sectoral conglomerates to technology unicorns such as Zilingo, Inmobi, Nivea, Arvind, Adani, Mahindra, Kotak group companies and Paytm, among others.
Currently, the HR technology market in Asia stands at about $9 billion, according to industry estimates. And, an increase in mobile users in the region means newer possibilities in the way organisations can engage and empower their employees. That perhaps explains why enterprises in Asia are increasingly migrating to the cloud at a much faster pace than the entire world and “we are excited to lead the charge with HR technology that is tailored to the Asian context,” said Chennamaneni.
Sequoia India, the local arm of storied Silicon Valley venture investor Sequoia, recently closed its sixth fund at $695 million to invest across sectors such as technology, consumer and healthcare sectors across India and Southeast Asia. Besides, the firm also runs an accelerator programme called Surge wherein it invests in startups at a seed stage in the region.
While Sequoia’s Indian portfolio companies include Oyo Rooms, Byju’s Learning and online grocer Grofers, in Southeast Asia, the firm has investments in a host of Indonesian companies such as Gojek, Tokopedia and Traveloka, besides Singapore’s Carousell.