SUMMARY
Darwinbox’s total expenditure soared to INR 182.4 Cr from INR 63.6 Cr in FY21 on the back of a sharp rise in expenses
The HRtech unicorn spent INR 104.1 Cr on employee benefits in FY22, registering over a 2.6X rise from INR 40.8 Cr in FY21
Darwinbox, backed by the likes of Salesforce Ventures and Sequoia, is eyeing an IPO by 2025 and aims to achieve profitability in India by 2023
HRtech unicorn Darwinbox, which recently said that it was aiming to achieve profitability in India by 2023 and in Southeast Asia and the Middle East operations by 2024, saw its consolidated loss jump over 7.6X to INR 66.6 Cr in the financial year 2021-22 (FY22) from INR 8.7 Cr in the prior fiscal on the back of a sharp rise in employee benefit expenses.
As a platform that offers cloud-based HR solutions such as recruitment, onboarding, payroll, travel, and people analytics to organisations across the above-mentioned regions, Darwinbox earns a majority of its revenue from the sale of services. Its operating revenue more than doubled to INR 116.7 Cr in FY22 from INR 50 Cr in FY21.
Total revenue of the startup, founded in 2015, rose 124.8% year-on-year (YoY) to INR 121 Cr during the year.
There are three subsidiaries under Darwinbox’s parent entity Darwinbox Digital Solutions Private Limited—Darwinbox Asia Pacific Pte Ltd, PT Darwinbox Digital Solutions, and Darwinbox Technologies (DIFC) Ltd.
On the expenses side, Darwinbox’s total expenditure soared to INR 182.4 Cr from INR 63.6 Cr in FY21 led by an over 2.6X YoY rise in employee benefit expenses. At INR 104.1 Cr, employee benefit expenses accounted for 57% of the total expenses.
While the startup’s expenses towards salaries and wages jumped 121.5% to INR 86 Cr in FY22, its employee stock option scheme and employee stock purchase plan (ESPOs) cost, which was nil in FY21, stood at INR 11.8 Cr in FY22
The rise in employee benefit expenses was in line with the startup’s announcement post its $15 Mn fundraise from Salesforce Ventures in January 2021. At the time, Darwinbox said it was planning to more than double its team, expand its global footprint, and accelerate entry into the Southeast Asian and the Middle Eastern markets.
Darwinbox entered the unicorn club in January 2022 by raising $72 Mn in a funding round led by Technology Crossover Ventures (TCV).
Meanwhile, the unicorn’s IT expenses grew 2.9X to INR 28.3 Cr in FY22 from INR 9.9 Cr in FY21. Legal professional charges grew to INR 15.8 Cr in the reporting period from INR 4.3 Cr in FY21.
Darwinbox, which is also backed by the likes of Sequoia India, Lightspeed India, 3one4Capital, and SCB 10X, among others, currently claims to have over 700 enterprises, including Vedanta, BigBasket, Tata, Bharti Axa, MakeMyTrip, Paytm, and CRED, as its customers.
Inc42 reported in November last year that Darwinbox secured $4 Mn (INR 32.5 Cr) in funding from Microsoft Corporation in its extended Series D funding round. Post that, it raised another $5 Mn in the extended Series D funding round from the State Bank of India (SBI) last month.
Darwinbox, which is eyeing an IPO by 2025, has been on an expansion and hiring spree. Despite the economic downturn, which has led to a funding winter in the startup ecosystem and over 21,000 layoffs since 2022, Darwinbox founder Rohit Chennamaneni recently announced opening of its new headquarters in Hyderabad and hiring 1,000 new employees across product development, engineering, and data science teams.
In November 2022, Chennamaneni said that the company would increase its headcount in India to 2,000-2,500 from 1,000 in the next two years.
Darwinbox competes with the likes of Workday, Oracle Fusion, among others. A Fortune Business Insights report estimates the global HRtech sector to grow to more than $35.68 Bn by 2028, expanding at a CAGR of 5.8% between 2020 and 2028.
