Angel investors more drawn towards HR tech startups: Study

Investors seem to be keen to invest in startups that will be able to skill workforces and make them future ready

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Looks like angel investors and venture capitalists are more drawn towards HR tech startups, especially the ones driven by artificial intelligence (AI) and aimed at upskilling and managing employees, and also assessing them. In fact, HR startups in tier-2 and tier-3 cities are more attractive to them. A study by Venture Intelligence reveals that in 2019, about $116 million was invested in about 19 HR tech startups. The figure was only about $55 million a year earlier, that is, in 2018.

The attention on HR and job tech is increasing probably because companies are increasingly going digital and the e-commerce space is already almost saturated. Fintech was at the peak in 2019, but in 2020, among other B2B sectors, HR tech seems to be the most popular.

Investors, such as Sequoia, Accel India and Tiger Global have been widely participating in the funding of various startups. Some of the new companies, such as Darwinbox and InterviewBit are returning to seek further investments after having already raised funds in a seed round. Asian investors, including Recruit Holdings and Beenext from Japan are keen to invest in the HR technology sector in India.  In January this year, the job portal, WorkIndia, managed to bag funds worth $5.8 million from Xiaomi.

Unitus Ventures is looking forward to funding job tech startups that are focussed on upskilling, assessment and job hunting. Its investment fund is worth Rs 300 crore. According to the study, investors seem to be on the lookout for companies that will be able to skill workforces and make them future ready.

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