[Funding alert] HRtech startup ZingHR raises $10M from Tata Capital Growth Fund II

The investment would be utilised for geographic expansion, technology upgradation, and to strengthen the company’s outreach to the right talent.

ZingHR, a Microsoft-accelerated HRtech startup, has raised $10 million in funding from Tata Capital Growth Fund II, the flagship private equity fund of Tata Capital.

Tata Capital’s private equity arms will own 33 percent stake in the company after the investment.

Founded in 2014 by Prasad Rajappan, ZingHR has been leading tech-driven transformation in the HR domain, helping organisations to align their automation transitions with desired business outcomes while enhancing the employee experience. 

“At Zing HR, our efforts have been focused on driving an employee-centric approach while helping organisations leverage technology in order to meet their business objectives,” said Prasad, MD and CEO of ZingHR, in a statement. “This funding will be critical in further taking our expansion plans and strengthening our 'Outcomation' approach across different verticals.” 

“We are also pleased to work with Tata Capital Growth Fund with whom we share similar ethos and values of building an employee-centric workplace ecosystem. We wanted to raise real capital once we became EBIDTA and cash positive, which we achieved last year,” he further added. 

The company plans to use the investment for geographic expansion, technology upgradation, and to strengthen the company’s outreach to the right talent. 

The company has a presence in markets such as Australia, Southeast Asia and the Middle East. It plans to consolidate its presence in these markets whilst growing in India. In the next two quarters, it plans to expand to Europe, US and North Africa.

“We now just need to scale up our efforts in global markets and with the new fundraise, we are going to aggressively pursue these markets,” Prasad added.

With this round, the startup has so far raised $12 million. It raised $2 million from seed and angel funding, and strategic investments. Accel Partners, serial entrepreneur Bhavin Turakhia, Mumbai Angels Network, and investment firm Triton have previously invested in ZingHR.

The startup has been profitable for the last 12 months and has an annualised revenue run rate (ARR) of $10 million, Rajappan said.

“Our target is to grow the revenues 10x over the next 12-18 months,” he said.

ZingHR has been leading the field in promoting the ‘Outcomation’ approach wherein the focus is on Tangible Business Outcomes (TBO) rather than automating people processes. So far, ZingHR has raised  

The company serves over 700 enterprises with a million employee records with vertical-specific solutions for  BFSI, retail, services, IT-ITES, staffing, pharma and healthcare, and manufacturing. 

It offers complete solutions in HR using artificial intelligence, and machine and deep learning algorithms.

On how Tata Capital's investment would help the startup, Prasad tells YourStory “Tata capital brings a lot of credibility, trust and adds a lot of global governance practices into the picture. It matches with our DNA. ZingHr in that sense is very a conservative and below the radar player while we do about 15 lakh employer records, customers.” 

“The DNA of Tata helps bring a lot - they're not just an ecosystem, but the brand Tata itself will help us go to a lot of large customers,” he added. 

Tata Capital took about 8 to 10 months to do due diligence before it invested in ZingHR.

The SaaS company grew by 25 percent in FY21, and hopes to end FY22 with a 40 percent growth, added the CEO. 

The company plans a 10:30:90 business growth, meaning in the next two years, the startup wants to grow 10 times,  get 30 percent more in profit before tax and 90 higher in Net Promoter Score(NPS). 

The company also expects to increase its workforce to 1500 members in the next three years. It has about 450 employees in payroll now, out of which 110 is part of the technology team.  

Edited by Kanishk Singh