The idea is to bring consumer tech to HR applications: Darwinbox co-founder

Darwinbox, a SaaS-based human resource solutions startup founded in 2016, recently entered the Gartner Magic Quadrant -- the youngest company to have done so. Darwinbox solutions are accessed by over 600 enterprises, touching over 1 million people. CHAITANYA PEDDI, co-founder, spoke to Shivani Shinde about the company’s growth so far, and the road ahead. Edited excerpts:

What is Darwinbox all about?

We are an end-to-end HR solutions platform that is SaaS-based. Organisations use 15-20 systems to manage complete people operations. There would be a system for hiring, one for onboarding, one for payroll, and so on. If you want to build a good analytics layer, aggregating data from all these systems is practically impossible. There will be data leakages and systems won’t integrate well.

We also realised that HR practices are different in every region. Local culture has a lot of impact on how you manage people. HR is very culture- and context-driven. If you build a system aligned to Western culture and context, it might not work so well. In India, for example, we’re very hierarchical as a society. You need so many levels of approval and every process is typically very complex. The way we manage time is different, we do not measure in hours, but in days. Since we are a manufacturing-intense country, we have very complex roster requirements and overtime requirements.

How is Darwinbox unique compared to other SaaS-based HCM players?

We deliver a unified HCM application framework where the core is powerful. HR systems are one of the few applications in an organisation that touch every employee, right from the CEO to entry-level persons, to those working in factories. We realised early on that the UX experience has to be simple, and so we developed a consumer grade UX where the experience is similar to apps like Amazon, Facebook or Uber. The system has to be intuitive.

Two, our focus was to make the system as mobile-first as possible. We found in our early days after speaking to 60-70 CHROs and CIOs that users lack access to HR systems. So, we created mobile-first applications that have features like conversational UX with voicebot, facial recognition, touch-free attendance, WhatsApp integration for real-time, and others. The idea is to bring consumer tech to HR applications and make it faster, and easy to use.

What made you focus on HR?

The three of us have corporate backgrounds, with time spent in EY, Google and McKinsey. We were all in client-facing positions. We also were involved in several M&A deals. While auditing, you typically focus on three areas -- financial systems, customer systems and HR systems. When it came to auditing or diligence, the financial and commercial divisions would happen in no time. However, the HR diligence would be a nightmare.

This is true for enterprise-level clients, too. Basic data on HR would take from a week to two weeks for them to revert with responses. Even after that, the data is not clean or accurate. And these companies are using systems from large players. That is when we started talking to CHROs and CIOs to understand the issue and realised that there is an opportunity. 

We also realised that 70 per cent of users do not have access to desktops. In manufacturing too, supervisor-level people do not have access to desktops. This means you should be accessible and connected on mobile.

The pandemic has put the focus on HR. How did it impact Darwinbox?

The pandemic accelerated digital transformation by at least five times. And this is true for India as well. Migration to the cloud and ensuring that systems are available at any point from anywhere became a necessity. It is not a differentiator any more. This accelerated our journey as well. We grew very significantly in this period. Going forward too, it’s going to be a hybrid working environment. This means from the tech aspect, organisations have to support such fundamental shifts in workplace dynamics.

Today, the biggest demand from HR teams is tracking productivity. No one earlier focused on tracking this. Are people logging in at the right time? Are they doing what they are supposed to do? The second is employment engagement. Hiring and onboarding is happening online, so the question is, how to engage with this group of people, communicating the vision and keeping them engaged? Co-related to this is whether my engagement mechanism is correct. And, all this has to be done in real-time.

These two primary drivers will change the HR landscape in future. We have to push ourselves in terms of pace of delivery. We released a separate module called Evolve, which brings to the fore the productivity issue. Over the last year and a half, we have done more than 300 implementations remotely, in a shorter duration and well optimised. In terms of growth we have doubled down in 2020.

How did the Gartner Magic Quadrant entry happen?

The Magic Quadrant is considered to be the gold standard in assessing product maturity. They have subsets of categories in terms of applications, and we were in the HCM category. Other than accessing the product, the Gartner Quadrant also takes into consideration the vision of the company and how they execute. It is a very extensive process, but for us it is validation of our strategy.

What are your plans for expansion and raising funds?

We are an India and South East Asia-focused company. We thought that if we could create a product that answers all HR issues in India, we can tweak it for any geography. We will be expanding into West Asia as well. In terms of funding, we have an excellent cap table, with investors like Sequoia, Endiya Partner, Lightspeed, 3one4 Capital, Salesforce Ventures, among others. We raised a bridge round of $20 million recently, so we are well-funded. Besides, SaaS as a business model does not need much funding.