[Funding alert] Darwinbox turns unicorn; raises $72M in Series D round led by Technology Crossover Ventures
Hyderabad-based HRtech startupraised $72 million in a funding round led by Technology Crossover Ventures (TCV), along with participation from existing investors Salesforce Ventures, Sequoia India, Lightspeed India, Endiya Partners, 3One4Capital, JGDEV, and SCB 10X.
The company’s valuation post the Series D round has crossed the $1 billion mark, with the total investment raised thus far crossing $110 million. The company has grown 200 percent since the last fundraise from Salesforces Ventures, around a year ago.
Founded in late 2015 by Chaitanya Peddi, Jayant Paleti and Rohit Chennamaneni, Darwinbox aims to use the funds for global expansion by accelerating its platform innovation agenda, strengthening its product, engineering, and customer success teams, along with scaling its go-to-market (GTM) presence in South Asia, Southeast Asia, and MENA (Middle East and North Africa).
The team added that they aim to take Darwinbox public by 2025.
In a conversation with Shradha Sharma, Founder and CEO, YourStory, Rohit, Jayant, and Chaitanya spoke about Darwinbox’ journey to becoming a unicorn. When asked what does the coveted status means for the team, Rohit said,
“It is a milestone; we will feel happy about it for maybe a day, but after that, it is going back to business. It is just a milestone and not the destination. The journey has been a humbling one, with customers believing and taking bets on us at different stages. Also, our employees took the faith and belief in Darwinbox in the early days, and the right investors came at the right time.”
The new unicorn is a cloud-based HRtech platform that caters to an organisation’s HR needs across the employee lifecycle, including recruitment, onboarding, core transactions (leaves, attendance, directory), payroll, travel and expenses, employee engagement, performance management, rewards and recognition, and people analytics.
The new-age platform combines highly configurable workflows, intelligent insights, and smart interfaces to help enterprises unleash the true potential of their workforce.
“Valuations are an outcome and these are generally tough to handle. What we can control is the product. Building for extraordinary agility and delivering stellar employee experience have been critical in defining success for Darwinbox’s customers. We will continue to invest in new and innovative technology to deliver a frictionless experience for the work-from-anywhere workforce,” said Chaitanya.
The trio worked for the likes of McKinsey and EY, as well as their clients, and realised that those companies did not have the best HR systems. The main asset for these companies were the people, and they needed the best systems for HR.
So, they decided to start Darwinbox in 2015 with an investment of less than Rs 30 lakh. Their first breakthrough came in the form of Delhivery. Now, the company is expecting the overall team to grow by 100 percent and is also preparing to launch in the US this year.
Darwin co-founders Rohit, Jayant, Chaitanya
Building for the employee
“Among those who gave initial feedback was Mohandas Pai, an early investor in the startup, who said, ‘if you are building something in the HR space, can you build something for the employee? At least someone needs to build for them.’ Many previous HR systems have been built for the IT function, but our system touches everyone in the company – from the CEO to the fresher,” explained Jayant.
He added that the idea is to focus on what kind of problems you are solving for the last mile. “It was this hypothesis that gave us the courage to go head-on against larger giants who possibly have funds that can rival the GDP of a small nation,” he added.
"Investing behind technology to manage talent has become inevitable for organisational success. Darwinbox demonstrated the ability to build agile, innovative, and user-friendly solutions along with deep customer-centricity – which has made them a platform of choice for several leading enterprises,” added Jessica Neal, former Chief Talent Officer at Netflix, and a Venture Partner at TCV.
Adding further, Chaitanya said, “The product’s focus is on solving the challenges of people function in large and diverse organisations with complex structures using the best of technologies. We will invest heavily in further strengthening our platform, especially our analytical layer with AI and ML capabilities to aid decision-making.”
Competing with giants
The founders said what helped them in their journey was keeping up with the pace of change happening around them. They added that agility and building around customer needs are important for success.
The company also stated that over 1.5 million employees from large conglomerates, fast-growing technology giants, and leading global brands like Nivea, Starbucks, Dominos, T-Systems, AXA, Tokio, Cigna, JSW, Adani, Vedanta, Mahindra, Kotak, NSE, Ujjivan, Makemytrip, Swiggy, and Tokopedia were able to adapt to the new normal with Darwinbox.
“SaaS is a new opportunity today, and it is India’s next big opportunity for the world. It is a convergence of multiple factors coming together – talent, ability to sell, and multiple things coming together at the same time,” Jayant said.