How apna became one of India's fastest unicorns with almost zero annual revenue
How apna became one of India's fastest unicorns with almost zero annual revenue
The two-year-old professional networking platform for blue- and grey-collar workers raised $100 million in a Series C round in September. The company plans to use the funds for global expansion and to scale up its skill tech platform
Manu Balachandran is a writer for Forbes India, based in Bengaluru. At Forbes India, Manu writes on automobiles, aviation, pharmaceuticals, banking, infrastructure, economy and long profiles among many others. He also moderates many of Forbes India's CEO and CXO events and hosts Capital Ideas, a podcast on the most riveting success stories from the business world. He has previously worked with Quartz, The Economic Times and Business Standard in Mumbai and New Delhi. Manu has a master's degree in journalism from Cardiff University and a degree in economics from the Loyola College. When not chasing stories, he is most likely obsessing over Formula 1 (Read: Lewis Hamilton), historical events and people, or planning long weekend drives from Bengaluru
In the land of unicorns, there is a new one now. And it’s one of the fastest ever. On September 15, Bengaluru-headquartered apna became a unicorn after the company raised $100 million in Series C funding led by Tiger Global, at a total valuation of $1.1 billion. apna’s latest round of funding is the third in 13 months, catapulting the company into India’s 27th unicorn of 2021.
It is also among the shortest time that an Indian company has taken to become a unicorn. apna achieved the feat in 21 months since it was founded. The two-year-old professional networking platform for blue- and grey-collar workers had earlier raised $70 million in a funding round led by US-based investors Insight Partners and Tiger Global on June 16, valuing the company at $570 million. The latest round of funding saw companies, including Owl Ventures, Insight Partners, Sequoia Capital India, Maverick Ventures, and GSV Ventures, invest in apna.
“For me, valuations are directional markers of success,” says Nirmit Parikh, the CEO and founder of apna. “We don't want to get away from our goal. When you combine a deep social purpose to a robust business model, it is fostering a lot of investor confidence.”
apna, the app that Parikh founded in 2019 is currently live in 28 cities, including Mumbai, Delhi, Bengaluru, Hyderabad, and Pune, among others. The platform has over 5 million jobs and 16 million users on its platform. Every month, the platform helps facilitate over 15 million interviews, and the list of employers on its platform includes Flipkart, BigBasket, Amazon, Byju’s, and Swiggy, among others.
apna essentially helps first-time internet users access professional opportunities, collaborate with others, gain new skills, and create communities that can help motivate them and find jobs. That includes communities for professionals like beauticians, carpenters, painters, and telemarketers, among others. Once on the platform, job seekers enter their personal information, which is made into a virtual business card that’s then passed on to potential employers. On the apna app, the company claims that a hiring process is completed in less than 48 hours with candidates directly connecting with recruiters.
“These are people who have done very little schooling and they are often scared,” Parikh had told Forbes India in June. “So, we needed a fresh approach because when you go and build something which touches the heart, the possibilities are limitless.” Apart from a non-formalised approach to jobs, which meant not requiring a resume, and creating vertical communities, the company also began focusing on local languages to tide over the language barrier. Over the next few months, apna plans to expand to Southeast Asia, Africa, and the US. The latest round of funds will help towards that.
“Raising cash is our privilege,” Parikh says. “Using cash is our choice. Whatever dollars we raised in our Series A, we are using those dollars. After that, we did Series B and C. So, this is a war chest. But as the company is growing and ambitions are growing very fast, we want to invest this cash to keep improving the products and keep building a world-class team.”
The company intends to strengthen its presence to over 300 cities and 4,000 towns across India by end of the year before embarking on an international journey next year. “We're going to launch in these multiple new markets in parallel and kind of blitz scale,” says 33-year-old Parikh. “It's going to be a similar business model. There will be a lot of cultural innovations based on the countries in which we launch.”
Apna time aa gaya
apna’s journey into a unicorn also comes at a time when India’s economy has begun to recover after months of a slowdown following the pandemic. Blue-collar workers in the country had been among the worst affected during the Covid-19 pandemic, with over 10 lakh jobs being lost as a result. That had also led to an income loss of Rs 2,467 crore per month.
India currently has over 300 million blue-collar workers, and the number is expected to grow by nearly 10 percent every year. That means a massive opportunity for companies like apna, which have an early-mover advantage in the sector
“The funding gives apna more firepower to both double down on the things that are working as well as launch newer initiatives that better cater to the needs of their users,” Harshjit Sethi, managing director for Sequoia India, tells Forbes India. “The company has established market leadership to become India's largest jobs and professional networking platform in a very short time but is still not present across the country. The additional funding will help accelerate new city and new vertical launches.”Then there is the massive opportunity that Parikh reckons awaits in upskilling workers who come on the platform. That’s also the reason why Owl Ventures, one of the largest venture capital firms in the world focussed on education technology, has joined the list of investors in the recent round, with plans to help the company’s skill tech expansion plans. “We wanted people who have seen multiple journeys of building educational companies across the world, and that’s why partners like Owl become important,” Parikh says. “We are reimagining the way skill tech has happened around the world.”
At the moment, apna has three areas of focus. There is a marketplace for jobs, a professional social networking platform and an upskilling business. “Each of them is going to be an independent, multibillion-dollar company,” Parikh says. “We are India’s biggest on the marketplace jobs platform. We have a professional social network which is a community, and we are also the biggest in the country in our category.”
On the jobs marketplace, the company has tied up with the likes of Flipkart, Swiggy, Zomato, Burger King and Delhivery, among others. Currently, all the jobs listed on the apna platform are verified and free of cost for the candidates. The networking platform allows workers to connect with peers to clarify doubts, and even find opportunities together.
“I’m a strong believer in peer-to-peer learning,” Parikh had told Forbes India earlier. “I think you just need to get people in a group and the magic starts.” Today, there are over 70 such channels for different types of work. “Apart from this, there are a lot of job openings available,” Parikh says. “We are something special. We are not an XYZ of India. We are the apna of the world, we have grown north of 125x over the last one year and the growth rate is only increasing every single month.”
Apart from finding jobs and helping with peer-to-peer learning, the company will also use its latest round of funds to scale up its skill tech platform. “Now we're building a skill tech platform for 96 percent of India's workforce,” Parikh says. The company will have to develop its own skilling content since it believes there is a significant shortage of content when it comes to skill development.
All that means the company will soon begin monetising across the platform, particularly by 2022. So far, apna has been focussed on acquiring customers, and the company has only run pilot projects to ensure revenue viability. “We are going to start exposing more and more population of our user base to this. Today, we’re at 0.1 percent or 0.4 percent, and we want to slowly increase it. There is a long-term lens of monetisation,” Parikh says.
And that won’t be a difficult task, particularly since the company has acquired a large user base, bringing down its customer acquisition costs. “On the jobs platform, you'll make money when people are doing interviews… that is where the dollars are going to come in,” Parikh says. “Through education products, we can upskill people. Then there is a distribution product where electrical companies want to reach out to electricians or a wood company wants to reach out to carpenters or a paint company wants to reach to the painters in a geography.”
Long before Parikh began building apna, he had been bitten by the entrepreneurship bug while he was pursuing his engineering degree at the Institute of Technology at Nirma University in Ahmedabad.
Back then, he had built a company, Incone Technologies, that helped in the automation of dam gates, an idea that struck him after floods on the west coast in 2007. “It was super unsexy for a 19-year-old teenager to start a hydropower company,” Parikh had told Forbes India in an earlier interview. Years later, Parikh merged that business with his family-owned business. The company was largely engaged in solving the problem of floods, using artificial intelligence-based control systems that focussed on flood forecasting and reservoir monitoring. “I got my early learnings into how to design value propositions and positioning around business,” Parikh says. “We have automated north of 1,100 megawatts of dam automation across the country.”
Three years into setting up Incone, Parikh launched Cruxbot, which was later purchased by Kno Inc, a Silicon Valley startup, and eventually Intel Corporation. That acquisition brought Parikh to the US, where he became a director at Intel Education. In the Bay Area, Parikh soon realised that his love for entrepreneurship had led him to miss college life, and he soon enrolled for an MBA programme at the prestigious Stanford University. “I was turning 26 that year and I had been building companies back-to-back, and somewhere, I felt I wasn’t enjoying life,” he says.After graduating from Stanford, Parikh worked with Apple, where he oversaw the product and strategy of the software platform. While at Apple, Parikh had also begun to spend considerable time in India where he became privy to issues of unemployment during his frequent visits. “We say these are big problems the world is facing, but you never feel that you’re going to go and solve this,” Parikh says. He also saw first-hand the problems in hiring skilled workers at his family-owned manufacturing businesses.
“From the employer perspective, I knew the problems that we were facing, but I didn’t know from the candidate side,” Parikh says. “I went undercover as a blue-collar worker—as an electrician, foreman and shop floor guy. The idea is simple. Till you don’t feel the problem, you cannot build a good solution and I didn’t want to be one of the other companies. Quite often, people find a solution from the West and copy.”
That was the trigger, and Parikh knew he had a big problem to solve on his hands. Around the same time, Gully Boy, a Bollywood film, had hit the screens, and Parikh was particularly inspired by a dialogue from the movie. “I’m not going to change my dream because my reality is so, I would rather change my reality so that I can go and achieve my dream.”
Taking a cue from the popular song from the movie, ‘Apna time aayega (Our time will come)’, Parikh named his new venture apna.
In the early days, Parikh spent much of his time around the slums of Mumbai, trying to understand user requirements, and the latest version of the app, Parikh says, is the 16th iteration of its design. “Initially, we got users through word of mouth, as we used to visit the slums and chawls around Mumbai,” Parikh says. With users beginning to swell, the company also onboarded employers, starting out with small and medium-sized businesses, before expanding to companies such as Swiggy, Zomato and Delhivery, among others.
“In the last five years, hundreds of millions of Indians have come online for the first time,” adds Sethi of Sequoia. “Our conversations with some of these young, first-time internet users early on gave us an indication of just how aspirational they were. And we were convinced that a company that successfully caters to this emotion through employment and upskilling would become very successful. And that’s what led us to partner with apna right from the idea stage, in 2019.”
Since then, the company—that helps conduct over 18 million job interviews a month—has built up a steady user base through its mobile-based app that’s currently on the Android platform. “If you see, our budgets have been the same which we had planned in,” Parikh says. “Our burn rate for the transaction is getting better and better. Every single transaction we do, because of the network effect business, it just goes down.”
So where does apna go from here, after the newfound success? “Every company goes from zero to one, then from 10 to 100,” Parikh says. “I know apna is a kid which has gone into adulthood a bit too early. We are still very, very young. So, a lot of focus is on how do we find the best people, running best practices inside the company and taking far better decisions, without me becoming the bottleneck in the system. With a lot of capital coming in, companies have a lot of fiscal indiscipline. We want to avoid that.”