This funding marks Salesforce’s first investment in India and the only one in Asia outside of Japan.
Hyderabad, India headquartered enterprise human resource (HR) technology startup Darwinbox has raised US$15 million in its Series C funding round, the startup announced in a press release today.
The round was led by Salesforce Ventures, the investment arm of U.S. cloud-based software giant Salesforce, the press release stated. This is the tech giant’s first investment in India, and the first one in Asia outside of Japan.
Existing investors Sequoia Capital India, Lightspeed India, Endiya Partners, and 3one4 Capital also participated in the funding round, the statement said.
The fresh funding follows the $15 million Series B round led by Sequoia India raised in September 2019. The current round brings Darwinbox’s total capital haul to $35 million, the statement noted.
Founded in 2015, Darwinbox is a Software-as-a-Service (SaaS) HR-tech platform that handles an organization’s HR needs across the entire employee life cycle. Darwinbox’s platform helps enterprises with employee recruitment, onboarding, payroll, transactions like leaves, attendance, employee engagement, performance management, among other functions.
The startup currently serves over 500 firms including Puma, Nivea, MakeMyTrip, Tokopedia, Zilingo, the National Stock Exchange of India, ecommerce companies like Myntra and Tata CLiQ, foodtech startups like Swiggy and BigBasket, among others. These clients have over 1 million employees located across 60 countries, the statement noted.
Darwinbox competes with established global players like SAP and Oracle. It was recognized as one of the most preferred HCM platforms in APAC by Gartner in 2018.
The pandemic effect
As digital transformation gained priority amid the pandemic, Darwinbox witnessed a rapid surge in adoption, the statement said. It added that features like touchless attendance, digital rewards, digital hiring and onboarding, that come integrated with Darwinbox’s product suite were the key drivers of its adoption.
Darwinbox claims to have carried out 180 implementation of its product suite during the lockdowns last year, and recorded a revenue growth of 200%. The statement noted that the company’s revenue has grown 300% since its Series B round in late 2019.
“Globally, more and more enterprises are abandoning legacy offerings in favor of our modern, agile HCM (Human Capital Management) platform that helps them stay ahead of change,” Darwinbox Co-founder Jayant Paleti said in the statement.
Paleti told Bloomberg,”Since the pandemic, we are seeing a shift to the cloud within a few quarters that would have otherwise taken three or four years.”
According to Paleti, the startup will use the current investment to accelerate global expansion. Apart from India, Darwinbox currently has offices in Indonesia and Singapore as well.
Darwinbox Co-founder Chaitanya Peddi said, “Over the past years, we’ve shipped products at a rapid pace to become the most comprehensive HR suite and pioneered first-of-its-kind innovations to deliver superior employee experience.”
He added, “We will leverage the new investment to speed the introduction of exciting new solutions and advance R&D to deploy deep-technology capabilities.”
Huge opportunity ahead
According to a 2020 report by NASSCOM, India’s SaaS revenue reached $3.5 billion in FY2020 and is expected to grow 6 times to about $13-$15 billion by 2025. Moreover, the Indian SaaS industry has been growing 1.5 times faster than the global SaaS landscape. This indicates a huge potential for growth in the domestic market for startups like Darwinbox.
“India is home to one of the world’s youngest population, and by 2050, it is expected to account for over 18% of the global working age population,” said Salesforce India Chairperson and CEO Arundhati Bhattacharya. “This makes technology platforms like Darwinbox, that focuses on workforces, incredibly important.”
The potential for growth is not limited to the Indian market alone. Asia-Pacific (APAC) has the highest cloud adoption rate in the world, faster than the U.S. and Europe.
Salesforce Ventures Partner and Head of International Alex Kayyal said, “Cloud adoption in Asia is growing at a monumental pace and the pandemic has only further amplified the importance of going digital.”
Endiya Partners Managing Director Sateesh Andra said, “With the increased velocity of SaaS adoption in Asia, given the new mandate of Digital Workplace and the rising need for process automation, remote engagement and data-driven insights, a majority of the CHROs will turn to Darwinbox to implement strategies in order to deliver on their human capital’s promise.”
Images courtesy of Darwinbox