Tech behemoth Microsoft has made an undisclosed strategic investment in the Human Resource (HR) technology Unicorn Darwinbox as part of its Series D funding round. With this win-win collaboration, Darwinbox aims to touch the $100-million mark in terms of annual recurring revenue (ARR) by 2025.
But it’s not just an equity investment, the two companies have also signed a strategic partnership, including product integrations, co-innovation, and go-to-market (GTM) strategies. This is Microsoft’s first partnership with any player in the human capital management (HCM) sector.
Though the companies have declined to comment on the exact amount, the filing with the Ministry of Corporate Affairs in India reveals that Microsoft has invested around $4 million in the Hyderabad-based startup.
“This partnership with Microsoft marks a major milestone for Darwinbox, as we aim to revolutionize the HR management space with our cutting-edge technology,” said Jayant Paleti, Co-founder of Darwinbox. “We are thrilled to have the support of such a reputable tech giant as we strive to achieve our goal of reaching $100 million in annual recurring revenue by 2025.”
“We see huge potential in Darwinbox’s technology and we believe that this partnership will bring immense value to our customers,” said Sangeeta Bavi, Executive Director, Digital Natives, Microsoft India. “As a platform company, we are always looking for partners who can build on top of our platform and increase its value. Darwinbox is the perfect fit for us in this regard.”
Darwinbox primarily targets enterprise customers, which are Microsoft’s bread and butter, and over 90% of Darwinbox’s customers are already part of the Microsoft ecosystem. This makes the partnership a natural choice for the Hyderabad-based startup.
Under the partnership, Darwinbox’s customers will see deep integrations between the startup’s product features and Microsoft’s platforms, such as employees or managers performing HR-related tasks on the Microsoft Teams communication platform without leaving the app, and combining the startup’s analytics engine with Microsoft’s interactive data visualization software, Power BI, to offer better insights to their customers.
“In all the geographies where we are present or want to be present, Microsoft is already present. So, the thought is how can we work with Microsoft’s go-to-market engine and amplify our own sales motion,” explained Jayant.
In the next 12-18 months, Darwinbox is looking to go deeper into the markets where it is already present, before leveraging Microsoft’s presence in some of the newer regions it has stepped into or is looking to enter. The two partners are working on a joint GTM plan where Microsoft’s vast reach and Darwinbox’s innovative technology will come together to bring value to the customers.
“The Microsoft sales force doesn’t sell Darwinbox, but it enables door-opening and deal-acceleration conversations,” said Sangeeta. “In the last 5-6 years, we have tweaked our seller incentives because we have also been piloting a bunch of things. Now, the Microsoft sellers are incentivised to sell either Microsoft first party solutions or Microsoft Partner Solutions, which are built on top of the Microsoft tech fabric like Darwinbox,” adds Sangeeta.
Darwinbox boasts nearly 2 Million employees as end-users in 100 Countries
Darwinbox has 750 customers and nearly two million employees as end-users in 100 countries. The company has field teams in all the countries it is present in as it needs to provide customised solutions to its customers based on their requirements and the deal cycles vary from five to eight months.
“We will have an internal team that will work with Microsoft closely to ensure that we have a joint plan in terms of the accounts that we will go together with and in a lot of places, Microsoft will be able to accelerate/influence the deals,” said Jayant.
The Hyderabad-based company will double the headcount of its field sales team in the next 12-15 months. Currently, its field sales team is 50-member strong. Jayant said Darwinbox will follow its “normal” pricing protocol to create a new pricing framework, which will come into effect from April 1 this year.
The company was founded by Jayant, Rohit Chennameneni, and Chaitanya Peddi in 2015. Microsoft entities in India have over 20,000 employees in sales and marketing, research, development, and customer services and support across 11 cities in the country.
Microsoft has invested around Rs 32.6 crore in the Hyderabad-based company, according to the latter’s filings with the Ministry of Corporate Affairs.
