Darwinbox secures $40 million funding from Canada's OTPP

Hyderabad-based software-as-a-service firm Darwinbox has closed a $40 million (about Rs 350 crore) funding round from Ontario Teachers’ Pension Plan (OTPP), the company said in a statement on Thursday.

ET was the first to report on the OTPP investment in Darwinbox on August 7.

The investment, which has been made by OTPP’s late-stage and growth investment arm, Teachers’ Venture Growth (TVG), is a mix of primary and secondary transactions at a blended valuation of around $1 billion. The secondary deal of the round saw Peak XV Partners partially offloading its stake in Darwinbox.


In the statement, Darwinbox said that the investment will help the company fund its global expansion, particularly in North America, to meet the “growing demand for modern alternatives to legacy HR suites”. The company said it has grown threefold year-on-year since its entry in the region in 2022. However, it has started to double down on the US market since the last financial year.

OTPP, through TVG, has backed Indian startups including Mintifi, Perfios and Xpressbees.

In March, Darwinbox had closed a $140 million round that saw private equity firms KKR and Partners Group join the cap table as Lightspeed and a few early investors partially offloaded their stakes. Secondary transactions are usually finalised at 10-15% discount to a firm’s last primary valuation. The company was last valued at $1 billion in 2022, following a $72 million funding round led by Netflix-backer TCV.

For Peak XV Partners, which first invested in the firm in 2019, this spells a tenfold return on its initial cheque.

Founded in 2015, Darwinbox helps large organisations manage their human resource processes, including hiring and onboarding, attendance and employee management. It serves more than 1,000 enterprises in various sectors across 130 countries. Its customer base includes companies such as Starbucks, Nivea, Cigna, WeWork and Crisil.

Darwinbox had reported a 58% year-on-year increase in total revenue to Rs 392 crore for 2023-24. In March, its cofounder Chaitanya Peddi had told ET that the company was targeting a 50% revenue growth in 2024-25.

Over the past few years, Darwinbox has been expanding overseas, including Asia-Pacific, West Asia, the UK and the US.