Blue-collar HR firms rake in revenue, could weather recession

HR technology is experiencing “a boom that resembles the tech gold rush of the last two decades,” says Julian Tan, CEO and founder of FastCo.

The growth of HR tech companies that Tech in Asia spoke with seems to support Tan’s assessment. For instance, Indonesia-based MyRobin grew 11x in 2021, turning profitable a few months ago in June after pivoting to focus on blue-collar workers at the start of the pandemic. The revenue of a similar company called Staffinc – previously known as Sampingan – jumped 20x since 2019.

Regional ecommerce giant Shopee is one of MyRobin’s many corporate clients. / Photo credit: Shopee

The focus on blue-collar work for both companies is noteworthy. Recruitment companies targeting this sector have seen great demand in the past few years due to the spike in labor requirements at the start of the pandemic. The demand for these platforms has never been greater: For instance, blue-collar workers in China are logging onto livestream platforms to monitor job openings.

Startups organizing the sector’s underlying informality have a big task ahead of them. In Singapore, nearly half of the openings for blue-collar jobs remained vacant for six months or more in 2021.

Recognizing the opportunity that comes with plugging such gaps, startups catering to blue-collar workers make up a significant part of the HR tech boom, and it’s no surprise that investors are putting their money into this segment. For instance, Pintarnya, an Indonesian blue-collar jobs board which launched this year, has already picked up US$14.3 million in seed funding.

Others such as Singapore-based Workmate, for example, was recently acquired by a Japanese HR giant Persol for an eight-figure US dollar sum, while Indonesian firm Lumina received an undisclosed amount of seed funding in January. In India, Meraqui raised US$1 million, Skillbee netted US$3.2 million, and KarmaLifeAI bagged US$2.2 million in funding this year.

Broadly speaking, around US$14 billion was pumped into 330 HR startups worldwide in 2021. This year, the sector has received US$11.1 billion in investment as of September.

The influx of money can be attributed to how B2B firms have become a safe bet for VCs during this funding winter, making the HR tech an obvious choice.

End-to-end blue collar recruitment firms also supply delivery drivers for firms such as Grab. / Photo credit: 123RF

Right now, it seems that flexible, end-to-end startups such as Workmate, Staffinc, MyRobin, and FastCo spinoff FastGig are reaping the benefits of being the frontrunners in the blue-collar recruitment industry.

These firms have shown stable growth and attracted investor interest over the past few years. However, is this success tied to demand amid the Covid-19 pandemic? Or is there enough of a mainstay for companies to weather recessionary headwinds moving forward?

Ready for recession

While there is the looming impact of a recession on businesses, blue-collar HR firms aren’t afraid and even expect to do brisk business as they help others operate a lean, on-demand workforce.

Trust issues?