Darwinbox Bags $140 Mn To Boost Tech Stack, Overseas Expansion

Just a week after it was reported that DarwinBox is in discussions to raise a mega funding, the HR tech startup said it has bagged a funding of $140 Mn (about INR 1,218.1 Cr) in an undisclosed round co-led by Partners Group and KKR. 

The round also saw participation from growth equity firm Gravity Holdings.

The startup plans to use the fresh capital to accelerate its international expansion plans as well as deepen its tech stack. 

Darwinbox claims that it has achieved a fivefold growth in revenue in international markets over the past couple of years by focusing on building a “robust and diversified global portfolio”. This, it said, has led to its business from international markets contributing about 60% to its business.

“By placing the employee experience front and center — and ensuring our platform is deeply configurable to diverse local needs — we have helped transform HR for enterprises globally. With top-tier investors backing us, we’re poised to amplify our global momentum and deliver innovative AI-powered solutions for thousands of enterprises worldwide,” Darwinbox’s cofounder Jayant Paleti said.

However, the Peak XV-backed startup did not disclose the valuation at which it raised the fresh capital. Meanwhile, as per reports from last week, the funding round, which was supposed to be a mix of primary and secondary infusion, was to value the startup at around $950 Mn.

The startup entered the unicorn club in 2022 after raising $72 Mn in its Series D funding round, which valued it at over $1 Bn. 

Founded in 2015 by Paleti, Chaitanya Peddi and Rohit Chennamaneni, Darwinbox provides a cloud HR technology platform that provides comprehensive solutions for recruitment, onboarding, payroll, travel, and people analytics. 

Its HRMS platform also supports essential HR functions, including core HR, payroll, recruitment, performance management, and employee engagement. The Hyderabad-based startup’s clientele features the likes of Starbucks, Nivea, AXA, Cigna, WeWork, Crisil, among others. 

For the fiscal year 2023-24 (FY24), the startup claims to have reported 58% growth in its total revenue to INR 393 Cr on the back of its overseas expansion bid. It also claimed that its  EBITDA margin for the fiscal improved by 17 points.

On the other hand, the Darwinbox investment adds onto private equity giant KKR’s recent spree of doubling down on the India story. Most recently, it bought an undisclosed stake in cloud kitchen startup Rebel Foods. Its other investments in the Indian startup ecosystem include Lenskart, Livspace, LEAP, among others. 

It backed Darwinbox through Asia Next Generation Technology strategy, via which it seeks to back companies operating in consumer technology, software, and fintech across Asia. 

On the other hand, Partners Group made the investment through its growth equity strategy, via which it backs growth-stage entities globally. The Swiss PE major has deployed a capital of $2.5 Bn till date.

“Darwinbox operates in the rapidly  growing HR tech market, which we have been tracking through our thematic research. The company is acting as a  key disruptor to legacy platforms in this space, investing heavily in product innovation, generative AI, and global  expansion, and is well positioned to take market share,” Partners Group’s MD-private equity Cyrus Driver said.