Darwinbox sees revenue jump 58% to Rs 393 Cr in FY24 on R&D and international expansion
Besides allocating 46% of its operating revenue to R&D, Darwinbox has made strategic IP acquisitions to enhance its product lineup, including a compensation management platform that has grown 14X since acquisition.
SaaS unicorn reported a revenue of Rs 393 crore in FY24, up 58% compared to the previous year. The company attributed this growth to its R&D investments, an expanding share of international revenue, and increasing revenue contributions from existing customers.
According to the company’s latest statement, the revenue growth is also on the back of improved efficiency, with operating cash burn decreasing by 12% during the fiscal year of 2024. The company also noted a 17 percentage point improvement in its EBITDA margin.
"It's been a good year for us, with roughly 58% growth compared to the previous fiscal year," Jayant Paleti, Co-founder, Darwinbox, told YourStory.
“We're halfway through the current year, and we expect this growth trajectory to continue. Growth remains our focus as we strive to become more financially efficient and productive,” Paleti added.
The Hyderabad-based firm initially rolled out its product in India and quickly expanded into five Southeast Asian countries in 2019. This was followed by its entry into the Middle Eastern market in 2021. Since then, Darwinbox has experienced rapid growth in these regions.
“Last year's growth was driven by two main factors. First, we've been able to do more with our existing customers. For a good chunk of our journey—the first five years—we were catching up with the big players in our sector, which is dominated by SAP, Oracle, and Workday. We focused on building a critical mass of modules to compete, achieving feature parity within each module,” he explained.
"Second, we've made research and development a crucial focus area. R&D investments have always been high since day one. Last year, we increased our R&D spend to account for 46% of our operating revenue—a 43% scale-up from the previous year, which has allowed us to release more functionality," he added.
The company has further extended its global footprint by launching operations in North America 18 months ago. Over the years, Darwinbox has diversified its geographic footprint, with international markets contributing to 87% of total revenue last fiscal year and achieving a 5X increase in the past two years.
“Our investments in international markets have started paying off, leading to strong growth traction. From the last three quarters, between the US, the Middle East, and Southeast Asia, they contribute to more than 50% of the new ARR that was added,” Paleti explained.
Besides allocating 46% of its operating revenue to R&D, the company has made strategic IP acquisitions to enhance its product lineup, including a compensation management platform that has grown 14X since acquisition. Building on another key IP acquisition, Darwinbox is also planning to launch a new global payroll product for seven new countries early next year.
Customer expansion has been a significant growth driver for the company, with Net Revenue Retention (NRR) at 110%. Last fiscal year, 25% of new revenue came from existing customers adopting more of its solutions, the company said. In India, around 37% of new revenue was generated from its current clients.
Darwinbox was also recognised as the Customers' Choice in 2024 Gartner Peer Insights 'Voice of the Customer' for Cloud HCM Suites for 1000+ Employee Enterprises.
In August, YourStory exclusively reported the elevation of the company's CTO Vineet Singh as the fourth co-founder.
Founded in 2015, Darwinbox provides enterprises with advanced solutions for talent management through innovative employee experiences and AI-powered tools. Its cloud-based Human Capital Management (HCM) platform addresses HR needs throughout the entire employee lifecycle.
Currently, the firm caters to over 3 million employees from more than 900 enterprises across 130 countries. The company is backed by prominent global investors, including TCV, Microsoft, Salesforce Ventures, Peak XV, Lightspeed, and Endiya Partners, among others.