Market opportunity of $30 bn and BetterPlace has first-mover advantage
The size of the market for training, managing payrolls and related business services for the 450-million strong blue collar, unorganised workers across the country is $30 billion.
Two technocrats - Pravin Agarwala and Saurabh Tandon - are well on their way to streamlining the highly unorganised labour market via their technology-enabled platform BetterPlace.
The platform’s core concept is to support and provide for the blue collar workforce’s growth, monetary compensations, skill training and support systems.
The idea, Agarwala points out, was to bring more blue collar people from the informal to the formal economy, thereby improving their chances of leading better lives. Ergo, it was named BetterPlace.
The blue and grey collar space, according to Agarwala, has 450 million people in India. “Out of that, we target 158 million people who are in some sort of semi-formal or formal or informal economy like delivery boys, drivers and security guards,” Agarwala said.
He values the market as a $30 billion opportunity as there is an average spend of Rs 15,000-20,000 on each blue collar person - right from sourcing to training to managing payrolls and related business services.
The platform, founded in 2015 and based in Bengaluru, operates in both business to business (B2B) and business to consumer (B2C) markets. In B2B, it matches job seekers to appropriate openings through a smart algorithm, and then assist the businesses with lifecycle management solutions like hiring, background verification, attendance management, skill development, training, certification and healthcare for employees.
The business to consumer (B2C) model has the system scout for an appropriate gig for a signed up blue collar individual. Upon finding him a job, BetterPlace also helps him set up a bank account for payroll, financial and health solutions.
BetterPlace currently charges Rs 300- Rs 3,000 per person, depending on the type of service it provides. The company is looking to scale its offerings by including more services and expects to charge close to Rs 7,000 for them in the future.
The company claims to have been doing close to $10 million in annual recurring revenue (ARR) and is operationally profitable. With a staff strength of 250 and having reached break even earlier this year, BetterPlace is now looking to touch $20 million ARR by the end of this financial year.
Agarwala, co-founder and chief executive officer, grew up in Assam and did his engineering there before moving to Bengaluru. He has worked as VP and global head at SAP Business, India and is currently an investor and advisor in several startups including ConfirmTkt (investor and advisor), Flo Learning (co-founder and advisor) and Flexiapps Solutions (advisory board member).
Tandon has managed engagements across retail, pharma and agriculture sectors at data analytics firm Mu Sigma.
"A very unfortunate incident motivated the two of us to establish BetterPlace. It was an incident that involved a 6-year-old school girl in Bengaluru. There was a big question on the safety standards of Indians not just in schools but across the board. We did research for eight months to figure out issues of the blue collar workforce — challenges, tech consumption, cost to move up from informal to formal economy. That’s where an idea started forming. We realised that to have a high impact, we have to provide solutions to companies to address this issue," said Agarwala.
BetterPlace signed up Housejoy as its first customer in September 2015, and since then has added roughly 1,000 customers in large logistics, security and facility companies. Zomato, Accenture, JLL are among its top clients. The company is working on seven verticals and is planning to add five new verticals in manufacturing and retail.
BetterPlace claims to be adding more than 10,000 job seekers every day on its platform.
“The entire journey has been a roller coaster ride. There were moments when our assumptions were proved wrong but we managed to overcome them owing to a line of good advisors. We thought the entire concept would fall flat because of the authenticity factor. Mohandas Pai (former chief financial officer of Infosys and current chairman of Manipal Education) advised us to think differently. That's how we got into the background verification vertical," Agrawala said.
The company had been bootstrapped for a year and a half and later went on to raise seed funding and Series A. BetterPlace has raised around $6 million till date from investors including VH Capital and 3one4 Capital.
“At a time when long-term investments in human resources and labour empowerment have started to yield true productivity improvements in our economy, BetterPlace can leverage real horizontal innovation advantages and contribute even more powerfully to economic development,” Pai said.
“India will become a $10 trillion economy by 2030, and on that journey, the nature of work and the workforce will change. By working on the problems of demand and supply mismatch with active job creators in the market today, BetterPlace helps the ecosystem understand the changes more measurably. I think every policymaker and ecosystem player can engage with companies like Betterplace to help understand these dynamics better."
"The team at BetterPlace has focused on bringing platform-scale technologies to the full-stack of workflows in the semi-formal ecosystem,” said Siddarth Pai, founding partner, 3One4 Capital.
“By putting the labour force at the centre of a universe of innovation, BetterPlace is helping make organisations of all sizes more people-centric. They have the vision to solve the problem at every layer from the ground up and synthesise multiple requirements to improve engagement at every level. With the tremendous execution capacity in the team, we are glad to be working with them to scale this across industries and build a truly national platform."
Betting on high growth
Agarwala is looking at three times growth over the next 12 months and is also planning to add roughly 50,000 jobs per day in the system. The target is to add 20 million people in the database by the end of this financial year, he added.
Another immediate idea is to provide banking and health solutions to half a million people by the end of the current financial year.
"There is no competition from a horizontal point of view, we are very unique from that angle. Vertically, we have a lot of players in every segment. There are many job portals like Naukri, Quickr and so on. But nobody is integrating end to end with lifecycle management, there is none as of today," said Agarwala.