The COVID-19 pandemic and the global lockdown have led to mass hysteria, growing unemployment, and liquidity crunch across the world. While the job loss wave has hit India too, the scene is quite different in the Indian startup ecosystem. Amidst the pandemic, in 2020, several Indian startups like Nykaa, Razorpay, Postman, Zerodha, Unacademy achieved the Unicorn status reaching the coveted $1 billion dollar in valuation mark. In fact, it has been projected that the Indian Unicorn club is expected to grow steadily through 2021. By 2025, India is expected to have 100 unicorns. As India embraces digital acceleration and deep tech adoption more so, after the COVID-19, the country has seen a rapid growth trajectory, especially in the tech startup space. A recent joint report titled “Indian Tech Start-Up Ecosystem – On the March to Trillion Dollar Economy” published by the National Association of Software and Services Companies (NASSCOM) and Zinnov, global management and strategy consulting firm, revealed that 2020 saw 1600 tech startups with a record number of 12 new unicorns added in 2020. The year-on-year growth for tech startup over the last year has been 8-10%.
The COVID-19 pandemic played a major role in the digital adoption and shift to the internet in the country. This has created new business opportunities and tech startups are leveraging these areas, especially in SaaS based solutions. The NASSCOM report further mentions that 19% of the tech startups are leveraging deep tech solutions to build unique products suited for market expansions. The deep tech space is thus seeing a tremendous growth momentum, which is also attracting a lot of Venture Capitalists (VC) to invest in these startups. While 14% of the total investment is in the deep tech area, 87% of all the deep tech investments are in the Artificial Intelligence and Machine Learning area.
The seed-stage investments are also recovering at a faster rate. The seed-stage funding has recovered more than 90% from 2019 to 2020. For the first time funding, Banking, Financial Services and Insurance (BFSI), Edtech, and AgriTech industries are seeing positive growth.
Amidst the pandemic, the Indian tech startups not only managed to stay afloat, but they are actively identifying the opportunities and thus converting the crisis to opportunity. Interestingly, the digital maturity of India has jumped from 34% to 55% over the last couple of years. While job loss became a major concern in the last year, Indian tech startups are actively looking to recruit skilled candidates and fill the quickly growing demand for specialized skill sets.
Startups that became a unicorn in 2020 are now all set to ramp up their hiring across domains, including data science teams, tech, product, sales, marketing, operations, engineering, etc. Recent news mentions that these companies that became $1 billion in valuation in 2020 are now hungry for growth and are looking to recruit 10-100% to drive market expansion as well as invest in product development.
While job loss became a major concern in the last year, Indian tech startups are actively looking to recruit skilled candidates and fill the quickly growing demand for specialized skill sets.
Startup Unicorns Which Are Planning to Recruit
Razorpay is a Fintech company that became a unicorn in 2020 amidst the pandemic. The company is likely to recruit over 500 odd employees, mostly across engineering and product teams, as the company focuses on building solutions for small and mid-size businesses.
The homegrown multinational company that is the other unicorn to get added to the unicorn club, is Zenoti. This software product company is looking to add over 400 employees to its headcount. While the company is looking to recruit most of the talent in India, they are also looking out candidates for Seattle, Australia, and the United Kingdom. The present strength of the company is 550. The company is planning to hire for new product development as well as for market expansion and looking for candidates in different areas, including sales and marketing roles.
The other unicorn looking to hire is PineLabs. PineLabs became the first unicorn of 2020, where the funding round was pegged at $100-$150 dollar. Founded in 1998, this Noida based startup is a merchant platform and makes software for point of sale (PoS) machines. The company serves close to 140,000 merchants across 450,000 network points. The company is actively hiring and has stated to add 300 more employees to its existing employee base. The roles are majorly in the sales and tech space. The company has different digital payment offerings for its users.
The Bengaluru based SaaS startup provides a platform to software developers to accelerate the development process. The platform lets developers collaborate with different stakeholders. Postman is known to be the fastest SaaS startup that has reached the unicorn status. The company caters to more than 500,000 companies globally and is used by 98% of the Fortune 500 companies. The company is now looking to double its team size this year. It is now aiming to hire leaders across engineering, products, and design. The company’s hiring strategy will be focused on strengthening its artificial intelligence, product development, technology, engineering etc.
The other company recently added to the unicorn club and has reached $1 billion in valuation and is looking to expand its team base. The company’s current headcount is 400, and it is looking to hire 30-40% of its current headcount.
Another unicorn is looking to increase its employee strength by 10-20%. The used car segment is seeing strong tailwinds after the pandemic, and the company is looking to add more headcounts to its 3000 members strong team. However, recruitment would be more cautious.
People are relying more on online medicine delivery after the coronavirus outbreak, and the e-pharmacy sector had seen some major traction last year. This sector is booming well, and companies like Ascent Health and Wellness Solutions are looking to hire more candidates this year. In a news report, the company CEO mentioned that they are planning to hire 4,000-5,000 people this year as they continue to expand their pharmacy business. The company plans to continue its tie ups with pharmacies which is projected at 1 lakh. Currently, the company has 50,000 tie ups.
Other Unicorns to Watch out: Who Else Might Recruit in 2021?
Although these startups are being recently added to the unicorn list, their hiring plans are undisclosed at the time of writing this article. However, it would be worth watching out for.
It is an online lifestyle and beauty marketplace and is looking for a $3 billion IPO this year.
After a decade of its inception, FirstCry earned unicorn status in 2020. The company had raised $400 in funding from SoftBank in February 2020. Although there is no update for its hiring plan for 2021, it would be exciting to watch its growth in terms of recruitment.
Started as a bootstrapped startup, Zerodha has now reached the unicorn status with a valuation of $3 billion. Zerodha, a technology – based brokerage firm, has recorded tremendous growth in 2020, doubling its average monthly user addition from the pre covid times.
A well-known brand in the edtech space has made five acquisitions last year and is committed to growth this year. This comes as no wonder because among the few industries that are seeing excess growth as the aftermath of the covid-19 is edtech. The industry has attracted $4.9 billion already last year in investment and looking at the prospect of the edtech industry, we can expect to see hiring here.
Although we are not confirmed, it is not hard to guess that the company definitely has some growth plans, even though not only through hiring because this is one of the 30 companies that received funding from Google’s Digitization India Fund.
Along with these unicorns of 2020, Digit Insurance became India’s first unicorn for 2021. Valued at $1.9 billion to enter the unicorn club in 2021, this Bengaluru-based startup offers a user-friendly platform that leverages technology to make the process of buying insurance a seamless one. Jyoti Bansal’s B2B startup, Harness, also earned unicorn status with a $1.7 billion valuation after raising $115M. Experts have projected that India is all poised to have at least 50 unicorns by 2025, and it would be great to watch how the startups shape their hiring strategies in the coming months.
Expected Pay Package
While the salary varies to a great extent depending on the role and seniority level, the average salary package one can expect is between INR 15 lakhs – INR 60 lakhs per annum. The pay package can go higher to crores for senior leadership roles. A survey done on 1050 organizations across 20 sectors suggest a salary hike of 7.3% in 2021. The survey further revealed that hi-tech, IT, IT-enabled services, life sciences, professional services, e-commerce, and chemical industries are going to see the highest rise in salaries.
72% of the startups founders revealed that they are likely to increase their recruitment this year.
Major Challenges Startups Face to Recruit
While investments are coming in and startups are looking to recruit, the challenge that is poised now is finding the right talent. In a survey, 52% of the founders mentioned that hiring right is the biggest challenge for them. While high growth companies attract the talent pool, since the talent pool is limited, getting them onboard gets difficult. Time is another challenge for startups when it comes to hiring. While still in the stage of defining the buyer persona, looking for partners to test your MVP, working on a pitch deck, you also need to make your hiring strategy and recruit the right candidate, it definitely poises the startup in a challenging situation. Another major challenge for startups is building their brand identity. Since not many people know about the brand, candidates may feel sceptical about joining. Hence brands need to work on their digital presence and work actively on their employer branding to attract the talent pool.
Overall, hiring in startups has grown significantly since 2019. Even when job loss is on the rise, Indian startups are likely to see hiring picking up this year as startups bounce back in business improving their revenues. The growth now is tremendous, and some are seeing growth more than the pre covid times. In a survey conducted by InnoVen Capital, 72% of the startups founders revealed that they are likely to increase their recruitment this year. While some companies had to take harsher measures like cut down on jobs and salaries to recover from the hit, they are now back in the market and ready to ramp up their teams. While edtech, fintech, health tech hiring was seized last year, startups operating in these industries are expected to see an increase in recruitment in 2021. It would be interesting to keep a tab on the job market and watch how these startups perform in hiring in the coming months.