Darwinbox raises $72 million for its all-in-one HR cloud software solution

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Companies are embracing cloud HR technologies as their workforces become increasingly dispersed during the pandemic. According to PricewaterhouseCoopers, about 44% of talent managers are turning to cloud solutions to increase efficiency and productivity, while 35% see the cloud as a way to cut costs. In a recent survey by ISG, a technology research and consulting firm, 46% of companies said they use an HR software-as-a-service (SaaS) platform or hybrid solution (compared to 20% a two years), with 57% saying they plan to adopt a subscription-based SaaS or hybrid solution by 2023.

Benefits of cloud HR software include less paperwork and increased access to salary and benefits information, among other daily improvements. A KPMG report notes that cloud HR solutions can also lead to “smarter decision-making” through data analytics, AI and cognitive computing. Given the market potential, it’s no surprise that HR software vendors continue to grow at a rapid pace. Data from PitchBook shows that HR startups raised over $9.2 billion in venture capital from January 2021 to October 2021, a 130% increase from 2020.

One of the companies taking advantage of this boon is Darwinbox, based in Hyderabad, India, which offers HR software designed to help companies automate the employee lifecycle. Founded by Chaitanya Peddi, Jayant Paleti and Rohit Chennamaneni in 2015, Darwinbox announced today that it has raised $72 million in a funding round led by Technology Crossover Ventures at a valuation of over $1 billion.

cloud-based HR

Darwinbox CEO Chennamaneni was previously a search quality analyst at Google before joining McKinsey as an engagement manager. Paleti was a consultant at Deloitte and EY, while Peddi was previously a product analyst at Verizon Wireless and a senior consultant at EY.

Darwinbox’s platform hosts an enterprise social network similar to Microsoft’s Yammer called Vibe, as well as surveys that capture employee feedback and data points for analysis. Using the software, managers can send announcements, notifications, and other broadcasts to everyone in the organization, even those without corporate email.

“Darwinbox…allows HR stakeholders to create experiences for employees across their lifecycle,” Chennamaneni told VentureBeat via email. “[The platform] …helps visualize, monitor and control the flow of data. Integrations are possible in enterprise resource planning, finance and any other auxiliary system via open APIs and over 200 out-of-the-box integrations.

Darwinbox also offers “groups” – which allow employees to find other people in the company who have similar interests. The platform also has standard features such as time and attendance tracking, payroll and recruiting tools, travel and expense management, employee assistance services, onboarding workflows, performance management and people analytics. People analysis, also known as talent analysis or human resource analysis, refers to the method of analysis that can help managers and executives make decisions about their employees or labor -work.

Darwinbox relies heavily on AI and automation, with features like hands-free voice commands and a prediction engine that aims to “drive the right action at the right time throughout the employee lifecycle” . The platform uses AI and optical character recognition to process HR documents, including invoices, expenses and employee IDs, as well as match candidates to available positions, evaluating resumes on the fly. using a “multi-format CV analysis” based on a skills taxonomy.

“Darwinbox leverages AI and machine learning across modules to accelerate and streamline HR processes and functions across the employee lifecycle,” Chennamaneni added. “”Darwin”, the voice and chatbot of Darwinbox, is based on AI and machine learning. The time and attendance module enables employees to benefit from facial recognition based on Amazon Web Services’ machine learning-based Rekognition framework. Other use cases include security traffic blockers, load balancers, etc.

Bright outlook

Darwinbox competes with several startups in the cloud HR software market, including Namely, Remote, ChartHop, Visier, and Hibob. But the company’s focus on automation is trendy – and somewhat different. According to Personnel Today, 38% of companies are already using AI in the workplace, and 62% plan to start using it this year.

However, AI technologies can have drawbacks if not thoughtfully implemented. A recent study published in the Journal of Business Ethics found that algorithmic decision-making in HR recruitment and development is “not a panacea for eliminating bias.” Algorithms, the co-authors noted in conclusion, are vulnerable to bias in terms of gender, ethnicity, sexual orientation, or other characteristics if the algorithm relies on inaccurate input and training data. , biased or unrepresentative.

“[T]there is a need for transparency [in HR automation]; employees and applicants should be given the opportunity to understand what is going on in the process,” the co-authors wrote. “[C]Businesses should not rely solely on information provided by algorithms or even implement automatic decision-making without any monitoring or auditing by humans. While some biases might be more apparent, the implicit discrimination of less apparent personal characteristics might be more problematic, as these implicit biases are harder to detect.

In December 2021, New York City passed legislation that will require audits of AI-like HR technology – including technologies used for recruiting, hiring, or promotion – where technology is applied to New York residents. York. Companies must conduct third-party bias audits annually and provide a public summary of the results, those who fail to comply face fines of up to $1,500 per day.

Darwinbox

We’ve reached out to Darwinbox to ask about its ethical AI practices – including whether it has taken steps to address well-known flaws in CV parsing technology – and will update this article accordingly. accordingly as more information becomes available.

Cloud HR software comes with its own potential downsides, including the need for a consistent internet connection, less control over security, and fewer customization options. But Darwinbox says it has no trouble attracting new customers. The company of more than 700 employees – which says it has grown 200% in the last 12 months – has more than 1.5 million users across more than 650 brands, including Starbucks, Dominos, Calvin Klein and Cigna in its listing.

“With the pandemic and the world shifting to remote working, companies really have no choice but to rethink their talent management strategy and embrace digital transformation,” Chennamaneni continued. “The result is a three- to five-year shift in digital thinking for all things talent. HR technology has now become the primary driver of HR strategy. The pandemic has given us the momentum to conquer passive markets. In the past year, Darwinbox has grown by 200% and well over (300%) in growing markets like Southeast Asia.”

Darwinbox’s latest funding round – a Series D – has benefited from participation from existing investors including Salesforce Ventures, Sequoia India, Lightspeed India, 3One4Capital, JGDev and SCB10X. This brings the company’s total capital raised to over $112 million after a $15 million seed round in January 2021.

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