HR tech platform Darwinbox has recorded a significant 58% growth in total revenue, reaching INR 393 Cr during the financial year 2023-24 (FY24). This growth has been attributed to the company’s robust overseas expansion strategy and considerable investments in research and development (R&D).
The company also reported an improvement in its EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin by 17 percentage points during the same period.
“We grew by 58% last financial year on the back of strong execution. In the last two years, we have made significant investments in R&D and international expansion which have delivered promising results. International markets in fact contributed more than 50% of the new ARR added this fiscal year and is only going to go higher,” Jayant Paleti, cofounder of Darwinbox, told Inc42.
International Growth & Expansion
Headquartered in Hyderabad, Darwinbox has seen remarkable growth in its international markets, with revenue from overseas operations growing by 87% in FY24, a 5X jump over the past two years. Southeast Asia emerged as the company’s second-largest market after India, followed by the Middle East.
The company, which operates across India, Southeast Asia (Philippines, Singapore, Indonesia, Malaysia), the Middle East (Saudi Arabia), the US, UK, and Canada, launched operations in North America 18 months ago as part of its global expansion strategy. It now serves 1,000 enterprise customers globally, with 600 customers based in India.
Focus on R&D and Technological Innovation
Darwinbox continues to heavily invest in R&D, allocating 46% of its operating revenue to innovation in FY24—a 43% increase from the previous year. The company has also made strategic IP acquisitions, including a compensation management platform that has grown 15X since its acquisition.
“We are committed to continuously investing in R&D to stay ahead of emerging market trends and leverage technological advancements such as Generative AI. This has already enabled us to integrate intelligent automation, conversational experiences, and smart insights into our platform,” added Paleti.
Last month, Darwinbox launched a new payroll platform incorporating the RIVeR framework—an approach that ensures 100% digital payroll processing, further enhancing its product suite.
Strong Customer Retention and Growth
The company’s focus on product development and customer satisfaction has resulted in a Net Revenue Retention (NRR) of 110%. About 25% of new revenue last year came from existing customers subscribing to additional offerings, with 37% of the same figure in India.
Having begun its international journey in 2019 with expansion into Southeast Asia, Darwinbox entered the Middle East market in 2021. The platform now operates in five Southeast Asian countries and plans to launch a global payroll product for seven new countries early next year.
“What worked in India will not necessarily work there. Starting from tweaks to product, localising it for that geography to the kind of people that you need to hire, your broader strategy – everything needs to be different,” noted Paleti. He emphasized that the US market required more marketing efforts and new talent compared to the company’s operations in Asia.
Recognition and Future Plans
The company recently promoted its CTO Vineet Singh as the fourth cofounder and launched its next-generation payroll framework. Darwinbox was also named Customers’ Choice in the 2024 Gartner Peer Insights for Cloud HCM Suites.
Founded in 2015, Darwinbox is backed by prominent global investors such as TCV, Microsoft, Salesforce Ventures, Peak XV, Lightspeed, and Endiya Partners. It now serves over 3 million employees across 900+ enterprises in 130 countries. Darwinbox achieved unicorn status in January 2022 after raising $72 Mn in a funding round led by Technology Crossover Ventures (TCV).