ZingHR, a Microsoft-accelerated venture that has already turned profitable, will be looking to tap private equity (PE) funding for growth. The cloud-based HR solutions provider is planning to raise $8-10 million, and is eyeing a turnover of $22 million by 2022.
This will be the second time that the six-year-old company will be looking to tap PE funds. About two years back it had initiated discussions, but then decided to go slow and focus on becoming profitable.
According to Prasad Rajappan, founder and CEO, ZingHR is now ‘self sustaining’, which makes it easier to tap PEs. Funds will be raised toward strengthening sales and marketing activities across regions and also for new product development.
Product development
The strategy has shifted from automation to ‘outcomation’, wherein the focus is on tangible business outcomes such as topline, bottomline, growth through people process transformation and lean HR practices, said Rajappan.
New product development includes solutions such as robotic interviews and geofencing, which companies can use when travel options are limited, like now, when the coronavirus outbreak has forced companies worldwide to suspend employee travel.
“We will look at fund raising options again post March. The funds will be used for ramping up marketing, new product development and growth. We should be PAT (profit after tax) positive by the end of this fiscal,” Rajappan told BusinessLine. The company turned EBITDA (earnings before interest, tax, depreciation and amortisation) positive around last June-July.
So far, ZingHR has raised around $2.5 million including seed and angel funding, and strategic investments by Zeta, a digital payment and meal voucher company.
The company has over a million employee records across sectors such as BFSI, retail and manufacturing. It offers complete solutions in HR using artificial intelligence, machine and deep learning algorithms.
“Our solutions range from providing regular services like e-recruiment, e-learning, performance management and digital on-boarding, to organograms, succession planning, career planning, time and attendance, attendance, payroll, claim management and performance assessment solutions. Plans are afoot to increase our product suite,” Rajappan added.
Globally the hire-to-retire solutions market is pegged at $22 billion.
Revenue projection
ZingHR, which claims to have an annual revenue run rate of $7 million, is eyeing an over three-fold jump to $22 million by 2022. Revenues are on a pay-per-use-per-employee model, which means a company pays for the particular service or solution suite that it chooses and is charged on the number of employees it has on its rolls. The current focus is on mid to large enterprises.
Now, ZingHR has come up with vertical specific tailored solutions which can be easily installed by smaller enterprises. It has also created “experience zones” for the HR heads of smaller companies.
“We are also working on ramping up our overseas presence targeting European and African nations,” said Rajappan. Apart from India, ZingHR is available in Oman, Qatar, Saudi Arabia, Dubai, Singapore, the Philippines, Australia and Sri Lanka.
