Darwinbox set to hit $100 million ARR in 2025, expands focus on AI, US market

Rohit Chennamaneni Cofounder of DarwinBox

Hyderabad-based HR tech platform Darwinbox is set to reach $100 million in annual recurring revenue (ARR) by the second half of 2025, driven by its expansion in the US market and continued investments in AI (artificial intelligence)- driven solutions.

"We will be reaching an ARR of $100 million soon, by the second half of this year, or much sooner driven by our focus on expansion in large markets like the US," Rohit Chennamaneni, co-founder  of Darwinbox, told Moneycontrol.

ARR is a key metric for subscription-based businesses, representing the predictable, recurring revenue a company expects over a year.

This comes a day after the firm announced raising $140 million in a funding round including KKR and Partners Group. The round was a mix of primary and secondary investments. The company has strategically limited its primary fundraise, citing sufficient cash reserves from its previous round,  Chennamaneni said.

Focus on  R&D, AI

Darwinbox continues to deploy capital towards international expansion and R&D (research & development), with a particular emphasis on the US, where competition and operational costs are significantly higher.

"We are investing heavily in AI  as it gives us an opportunity to leapfrog ahead of legacy players like SAP, Workday, and Oracle. Our agility in product development allows us to innovate faster and stay ahead of the curve," Chennamaneni said.

The company spends 45 percent of its revenue on R&D, with a strong focus on AI-driven automation in HRTech solutions.

Growth in US, IPO

Founded in 2015 by Jayant Paleti, Rohit Chennamaneni, and Chaitanya Peddi, Darwinbox provides a cloud-based human capital management (HCM) platform with AI-powered features for enterprises. The company has gained traction globally, particularly in North America, where it has been growing its presence for the past two years.

Darwinbox, which turned a unicorn in 2022 and with an IPO on the horizon, the company is prioritising scalability in the US and predictability in revenue growth before making its public market debut. The firm's customers include Tata, Adani, TVS and JSW among others.

"IPO is on the path… but US and AI investments will define the timeline. We want to be predictable in terms of growth before going public, and the IPO will be in India," he added.

Darwinbox claims to have grown 3X in the last 2 years. The firm today serves more than 1000 enterprises and is used by 3 million employees globally, it said in a statement.

The company has reported a 58 percent increase in total revenue for financial year 2024 (FY24), driven primarily by its international expansion and the introduction of AI-powered products to its offerings.

The company's FY24 revenue stood at Rs 392 crore, marking a 3.2x increase over the past two years. This growth was bolstered by a rising share of international revenue, which reported an 87 percent increase in the past year.

Speaking about profitability, Chennamaneni said that the firm is now focusing on R&D.

"We’ve built a lot on existing products, and that’s where the money is going... but today, profitability isn't the focus—building out AI capabilities is," He said.