How Darwinbox Scaled & Won by Being Asia-Focused

Here at Lightspeed, we partnered with Jayant, Chaitanya and Rohit at Darwinbox at the Series A in 2017. I wanted to take a moment to reflect upon their journey since then and how, with all of their success and growth, they have stayed true to their instincts of designing for local, and building for global.

Our fundamental premise was that it is difficult to build systems that cater to the different cultural contexts of Asian businesses and users. More so if you’re building a system for human resources- which by definition impacts every employee at every level of an organization — making it that much more difficult to build a large platform that feels custom designed.

Yet, Darwinbox did both. It built big, built with cultural context, and instead of going to the West immediately, it decided to first focus and go deep in India and the Asian markets.

Asian requirements are different

When you build for less mature technology markets, unlike the US or Europe, not everyone has access to iPhones or multi-feature smartphones. Many established players optimize the mobile experience for iOS, which often doesn’t work well for devices across the spectrum.

The need in Asia is to build mobile apps because an entire generation of first-time Internet users lack access and have never worked on large screens or desktops. And then, you have to ensure these apps work well on devices that have low inbuilt memory, slower processors, sub-4G, or lower Internet speeds.

HR is culturally influenced, and the way we understand hierarchy, engagement and performance varies across the world.

Unique regional quirks can include multiple approvals, or the concept of ‘no show’ more familiar to those who have worked in India and the SEA markets, all of which need to be taken into consideration in the design of things.

Serving Asian customers as a strategic choice

It is practical for SaaS companies to go to the US, a well-established mature market. Very few make it to Southeast Asia and that too with minimal tweaks to their products.

Darwinbox, the latest Indian unicorn, primarily operates in designing and distributing a human capital management (HCM) software solution to companies, built on the premise that HR is that rare category of software where local context and design is everything.

Understanding Darwinbox’s journey into Southeast Asia is important. It helps companies in India learn how to approach & build for a large, untapped market. A market that, as recently as 2021, was expected to raise $20 billion in capital and has seen the birth of not one but two super apps in Grab and GoTo

The company’s experience and success in India led Darwinbox to identify similar trends in the region early on, and tap into a significantly large opportunity size across the SEA markets.

They noticed that while the startup economy in the region was growing, Southeast Asia also had a large traditional business market. So they engineered solutions for both, counting now, among other customers, both Indonesian e-commerce giant Tokopedia, as well as the Philippines conglomerate JG summit holdings

A business working in Southeast Asia also needs to have a presence on the ground. So having a local office is not an option, it is a necessity. And that’s just what they did, establishing local offices across Singapore, Indonesia and the Philippines to begin with.

This is where Darwinbox won over global legacy players in the segment.

It took time to understand all these requirements in the region — they entered the SEA market only in 2019, spending the better part of four years perfecting its systems for India. However, it took less than two years for Southeast Asia to become one of its most important markets.

Lessons from the India experience

The product managers at Darwinbox used the learnings from India and how companies managed large socio-cultural nuances to engage and retain employees.

Here, Darwinbox took, and aced, approaches that worked for its diverse customer base, taking into account the fact that a one-size-fits-all approach does not work in corporate HR, much like human relationships.

It built an end-to-end system, replacing three to five HR software systems at large enterprises. It saw great adoption because end-users — the employees — found the mobile-friendly interface easy and intuitive to use, something even the large conglomerates have not been able to crack.

So, for a client like Kotak Life Insurance, one of India’s largest Insurers, Darwinbox was able to help them combine and integrate the employee experience in one central zone (engaging more than 6+ systems). With more than 70% of their workforce being on the field the company has witnessed 90% mobile-first adoption. The employee engagement and satisfaction scores soared high as a result.

For Emcure Pharmaceuticals, a 30-year-old firm, Darwinbox’s 360-degree view of talent data and improved feedback mechanisms helped employees achieve a better work-life balance, letting them focus more on strategic aspects of the business. Putting together three disparate HR systems into one took Darwinbox 70 days for over 7500 employees, eventually improving their efficiency and retention rates.

Aligning HR technology uniquely to an organization’s culture and field of work is something the co-founders of DarwinBox have been thinking about for years. Chaitanya Peddi, Jayant Paleti, and Rohit Chennamaneni have all worked for large organizations like EY and McKinsey and have seen HR deal with complex situations at large enterprises. They saw that technology could solve most of these problems.

Building towards success

It took Darwinbox a little less than two years to achieve scale in Southeast Asia, which it entered in late 2019. Today, one-third of its revenue each quarter comes from Southeast Asia.

With over 650 enterprises and 1.5 million users, Darwinbox currently stands as the youngest and the only Asian-origin player on Gartner’s Magic Quadrant for enterprise Cloud HCM. It is also rated the highest (4.8) globally on Gartner’s customer reviews platform, Peer Insights, racing ahead of global peers.

Darwinbox plans to scale even faster going forward!

We at Lightspeed have been privileged to partner Darwinbox from its early days and look forward to everything they are going to build and do next.

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