India’s Sequoia-backed HR software startup explains why it’s expanding to Southeast Asia

The last time we caught up with Darwinbox in the summer of 2017, the Indian startup had around 40 major enterprise clients that were using its human resources software to keep track of 100,000 employees.

Now those numbers are way up: over 200 big-name clients – including the likes of personal care brand Nivea, e-wallet Paytm, and conglomerate Mahindra Group – with more than half a million staffers, co-founder Jayant Paleti tells Tech in Asia. It’s also getting plenty of love from fellow techies, with the roster including 10 Asian startup unicorns.

That’s good news for Darwinbox, which charges companies a subscription fee based on the number of employees it tracks with its system.

Paleti, 33, describes the web-based service as covering “the entire employee lifecycle” – from hiring plans and onboarding to exits – with companies using it to record business processes like payroll, vacation days, and performance.

Darwinbox this week announced its series B funding worth US$15 million, coming just over two years after a more modest US$4 million in its previous round.

Expanding in every direction

The five-year-old startup is using the cash injection to expand to Southeast Asia and add elements that will generate fresh revenue streams beyond the conventional subscription fee.

Darwinbox co-founders (from left) Rohit Chennamaneni, Jayant Paleti, and Chaitanya Peddi / Photo credit: Darwinbox

Initially all of its corporate clients were in India, but “the product – from the ground up – was made to be international,” Paleti says.

“In late 2018, we started doing a lot of work in Southeast Asia. We have an office in Singapore and Indonesia now. We have clients in those geographies; we have employees in those geographies.”

Around the same time, the founding trio – first-time entrepreneurs Rohit Chennamaneni, Chaitanya Peddi, plus Paleti – also got started on the first major evolution of the startup. It’s teaming up with other companies on tie-ins to the HR software that allow them to directly offer services to all those 500,000 users.

Paleti cites how a tie-in with ecommerce players Amazon and Tokopedia allows companies to reward staffers with vouchers for those sites.

Darwinbox is also testing out another feature: enabling partner fintech startups to offer loans through its dashboard. Since its software already has payroll data, its partners benefit from getting verification for a loan applicant’s income.

Another possibility is third-party health insurance.

“We are the heart of whatever happens in the functioning of a company,” Paleti says. Darwinbox has so much information on those signed-up staffers, and he describes such data as “touchpoints.” Every touchpoint is a place where a partner could offer a useful service directly through the HR software.

AI elements

The Oracle of Delhi