Seed to Unicorn - Endiya's Journey with Darwinbox
Darwinbox, one of Endiya Partners’ earliest bets on break-out technology startups building global products out of India, stands tall today as the 84th unicorn to emerge from this market. More significantly, Hyderabad-born Darwinbox joins the ranks of an elite club of homegrown SaaS unicorns that are disrupting global software markets.
While the broader global SaaS ecosystem had been gaining traction gradually for a decade or more, the pandemic accelerated demand as enterprises were compelled to expedite the digitization of their businesses in order to remain competitive. Last year, Gartner forecast that global end-user spending on SaaS would grow to over $140 billion in 2022. The need to transition to cloud-enabled SaaS platforms has become especially urgent in the area of human capital management (HCM) as remote and hybrid workforces take center stage in a vastly altered universe.
When we invested in Darwinbox in 2016, as part of the startup’s seed round, we had already started to anticipate the need for HCM solutions to evolve from transaction and compliance to centricity in the entire HR lifecycle of recruitment, performance management, learning, and engagement. We went into Darwinbox with the conviction that Indian SaaS startups were uniquely positioned to gain market leadership. (Read: Reinventing HR – India SaaS Opportunity for SaaS Startups)
That conviction has played out well beyond our expectations since Endiya started on its journey with Darwinbox founders Chaitanya Peddi, Jayant Paleti, and Rohit Chennamaneni. Within a year of our seed round investment, the company had scaled to 60 enterprise clients and 100,000 end-users.
Apart from the founders, the senior leadership team includes Gowthami Kanumuru, Head of Marketing and Customer Experience, who joined immediately after the seed funding round; Vijayshankar Ananthanarayanan, Vice President and Global Head of Transformation; Juancho Jerusalem, Vice President and Head of APJ Expansion; Shashwat Kumar, Senior Vice President of Global Customer Success and Delivery and Usha Vikas Patri, Director and Head of Design. The latter senior executives joined the company in 2021.
Today, as the company’s valuation crosses the $1 billion mark, its platform is trusted by over 650 global enterprises and more than 1.5 million end-users across more than 90 countries. The company’s clientele includes 35 unicorns across sectors such as technology (Internet, IT/ITES) along with manufacturing, retail, insurance, logistics, and pharmaceuticals — all sectors that deploy substantial field workforces. It commands an ACV (Average Contract Value) of $75,000 and has thrice doubled its ARR (Annual Recurring Revenue), including in 2021. Some of its well-known clients include Nivea, Starbucks, Dominos, T-Systems, AXA, Tokio, Cigna, JSW, Adani, Vedanta, Mahindra, Kotak, NSE, Ujjivan, Makemytrip, Swiggy and Tokopedia.
The company, which started out with a focus on regional markets, namely India and Southeast Asia, is now poised to go global. It currently employs 540-plus people, a large portion of which are located in Hyderabad. Darwinbox's meteoric growth, on the back of real revenues, isn’t surprising given the razor sharp focus of the founders and the senior leadership team on staying the course towards their goal – automate day-to-day HR processes, simplify human interactions and deliver actionable insights to enable enterprises to build better workplaces.
For Endiya, among Darwinbox’s many accomplishments, an especially proud moment was the company being admitted into the prestigious Gartner Magic Quadrant for Cloud HCM last year. We believe that the event is a validation of the fact that Darwinbox is creating a playbook for more SaaS companies, as it goes up and wins in the market against established players such as SAP, Oracle, and Workday.
The Endiya journey with Darwinbox is also the perfect manifestation of the investment principles on which our firm was founded – partner as a Co-founder VC with exceptional entrepreneurs as they build scalable and sustainable businesses, adding value by providing strategic and operational support from idea and market validation to team building to follow-on funding and governance. We have doubled down on our investment in each funding round, including the latest one that valued the company at over $ 1 billion.
In the founders’ own words: “There are few investors that get the entrepreneur context quite as Endiya does. It is comforting to know that there is somebody who has had our back always. As entrepreneurs, we are always about here and now or maybe two days later. But, Endiya’s investment team saw a little ahead and could caution and warn us at the right times to slow us down or push us to speed up.”
As India’s newest SaaS unicorn, a valuation milestone Darwinbox has achieved raising a modest $110 million from marquee investors, we believe that this Hyderabad-born startup is poised for greater heights in the years to come. And, Endiya Partners will continue to be an integral part of that journey.
Big Thanks and Hugely Grateful to the founders for giving us the opportunity to be part of the Journey. Gratitude from the Heart.