Bengaluru-based BetterPlace, an HRtech startup for the blue-collar workforce, has raised $3 Mn in a Series A funding round led by 3one4 Capital. Existing investors, including Venture Highway and Unitus Ventures, also participated in the round.
“We are focused on addressing the $12 Bn blue-collar ecosystem in the country. A significant part of the funds will be utilised to strengthen the existing ecosystem using frictionless solutions powered by AI and machine learning,” said Pravin Agarwala, cofounder and CEO of BetterPlace.
With this funding, BetterPlace aims to add new solutions and expand to new verticals such as skilling, compliance, and fintech services in order to consolidate its position as a single platform for the semi-formal workforce in the country.
Till date, BetterPlace has raised a total of $4 Mn in (disclosed) funding. In November 2015, it raised a funding from Lalitesh Katragadda, an ex-Google India head. It also raised about $1Mn (INR 6.6 Cr) from Unitus Seed Fund in February 2016.
“We are bullish about the growing informal economy in India, with the need to impact crores of people. The best way for social transformation is when people at the bottom of the pyramid can move up to the formal economy. BetterPlace has made tremendous progress since our last round, and we want to continue to be part of this success story,” said Will Poole, co-founder and managing partner, Unitus Ventures.
Take a look at the major facts about BetterPlace
BetterPlace: Moving Beyond Background Verification For The Blue Collar Workforce
Pravin and his cofounder Saurabh Tandon started their journey in early January 2015. The trigger for Pravin to start this unusual venture was a brutal incident at a local primary school where a girl child was molested by a PT staff. “Usually the non-teaching staff comes through word-of-mouth references or less reliable sources. The idea was to bring in a system which can bring in more transparency and trust into the system,” said Pravin.
While the duo initially started their venture as a background verification company, they soon realised the need for an enabler to bridge the existing demand and supply gap in the ecosystem. While employers are looking for the right skills and talent, workers are struggling with low salaries due to lack of proper skills.
BetterPlace thus moved to the B2B2C business model and created a digital platform to enable the entire ecosystem. They now provide employee lifecycle management services like onboarding, background verification, training, and certification, as well as attendance management, while helping employees get re-skilled. They also help employees avail of financial services like loans, insurance, etc, using their proprietary trust scoring.
“Nearly 450 Mn Indians work in the informal economy as security guards, drivers, plumbers, electricians, mechanics, in housekeeping, as domestic workers, construction workers, etc. They aspire to move to formal jobs, but are unable due to the lack of data and the trust deficit that comes with the demographics,” said Pravin.
As explained further by Anupam Bonanthaya the company’s CMO, BetterPlace provides skill-based training, customised in accordance with the needs of a particular sector. For instance, say there are 70 modules that a guard must know as per government norms, they incorporate that into their digital training modules. Also, when a security guard is required to be deployed to a mall, the modules are a bit different than when he is positioned in front of a departmental store.
Further, the pieces of training are in a story building format to engage the workers better and are offered in vernacular languages to provider greater mode of clarity. It presently covers Hindi, Kannada, Telugu, Tamil, Malayalam, Bangla, Marathi and more.
“Thus at the end of the day, you are a certified security guard here, skilled according to the workplace which may be a Mall, a manufacturing capacity or a logistics company. Also using our trust scoring mechanism, the blue-collar workers can avail better loan facilities as well as at the banks,” he added.
1.5 Mn Profiles, $4 Mn ARR, And Counting
Till date, BetterPlace founders claim to have helped its clients hire more than 1.5 Mn people with the right skills and credentials, at the same time helping 1.2 Mn people become credit-ready using their proprietary trust scoring algorithm. They said they’re adding 8,000 new individuals every day. BetterPlace boasts 500 clients including the likes of Flipkart, Ola, Swiggy, Accenture, TCS, Big Basket, among others.
It is currently doing an ARR (annual run rate) of $4 Mn, with a monthly growth of 13-15%. The startup is active in sectors such as logistics, on-demand services, IT-ITES, schools, facility management, and private security.
“If you go by the current order book and projected growth, the company is most likely to cross $15 Mn in net revenue over the next 18 months,” said Saurabh. The founders are further looking to scale their sales offices to Mumbai, Pune, Hyderabad, and Chennai.
In the words of Pranav Pai, managing partner at 3one4 Capital, this is the time when long-term investments in human resources and labour empowerment are starting to yield true productivity improvements in the Indian economy. “At this point, such a value proposition can leverage real horizontal innovation advantages and contribute even more powerfully to industry across the spectrum. BetterPlace is putting the labour force at the center of a universe of innovation, and helping make organisations of all sizes more people-centric,” he added.
The Blue Collar workforce management is a growing sector in the Indian economy owing to increasing urbanisation and deeper penetration of the Internet as well as digital modes of content consumption. This is also due to a demarcation between the existing players owing to the price-sensitive Indian population.
While a few like QuikrJobs, LinkedIn, Just Jobs, Aasaan Jobs, OLX Jobs, Nano Jobs, etc cater to the B2C segment, startups like BetterPlace are making the road easy for the B2B segment.
The upsurge in the demand for blue-collar workforce also pulled in players like LinkedIn last year. It even partnered with IL&FS Skills Development to help upskill blue-collar workers and job seekers in the country and improve their employability. TeamLease, Quess, and Adecco are a few other companies making their mark in this segment.
Going ahead, along with raising funds, BetterPlace may have to look for potential acqui-hires as well in order to maintain its grip in the segment amid other deeply funded players. So far, the opportunity is ripe enough to foray without any doubt in different verticals. It will certainly be interesting to watch how well BetterPlace will be able to create its market positioning while managing the lifecycle of the blue-collar workforce for corporates.