Apna Jobs: How does a Blue-collar worker startup become a Unicorn?
It's raining unicorns in India, thanks to an unparalleled funding spree for Indian startups across industries. Over $78 billion in funding has been raised collectively by 96 Indian tech startups that have joined the unicorn club.
Last year in September, Apna, a job marketplace for India’s blue-collar workers, became the 68th Indian startup to have entered the celebrated unicorn club after raising $100 Mn in their Series C round.
I clearly remember when Apna turned into a unicorn, startup communities were curious to know How it became a unicorn in less than two years. The answer is not easy as it seems, but I’m going to make an effort to share my point after a lot of digging.
Before I’ll tell you what exactly Apna is doing, let’s first understand the challenges faced by the Blue-collar workers desperate for jobs.
What are the employment challenges faced by Blue-collar workers?
India is the home to more than 400 million less-skilled workers (Blue/grey) looking for job opportunities. The number of jobs openings in the Blue & grey collar space is increasing year over year, thanks to the growing penetration of the E-commerce, logistics and transportation industries post-pandemic.
Despite the obvious need for skilled blue-collar workers, they are frequently mistreated and hampered by Job-search issues.
These workers either depend on informal referrals (e.g: A carpenter will ask his Painter friends about any work opportunity) or rely upon contractors/ recruiting agencies to get access to work.
While white-collar workers often upload their resumes on various job boards and forums to speed up hiring processes, Many blue-collar workers don’t have access to computers and aren’t educated enough to communicate their resumes to Employers.
But even after registering themselves with several contractors and recruiting agencies, Why do a majority of workers still find it difficult to get jobs?
Lack of trust in the traditional recruitment system as these bogus brokers/agencies charge high commissions to job seekers such as form-filling fees, without providing jobs or promising another job during recruitment for other jobs.
Often, The work offered by contractors/agencies has limited or no flexibility in terms of location or working hours.
These agencies may not guarantee consistent job opportunities, which may leave workers idle for months.
There are no records maintained (digital or otherwise) by these agencies or companies of work done by these workers, which might help these workers in future for new job opportunities. The whole recruiting process is time-consuming, expensive and unstructured.
As a result, despite spending a significant amount of their hard-earned money, the uninformed workers are out of work. This traditional system operates inefficiently that benefits mediators rather than actual participants (workers or businesses).
How Apna is trying to solve Blue-collar employment obstacles?
Nirmit Parikh first saw the problem in hiring skilled workers at his family-owned manufacturing businesses. Parikh spoke with employees and went undercover as an electrician and a floor manager to have a better understanding of the problems they faced.
Soon he realised that he could use technology to help Blue-collar workers find genuine work quickly and close to their homes. He left Apple and returned to India in 2019 to launch Apna, a professional networking and upskilling platform.
Once on the platform, job seekers enter their personal information which is being converted into a virtual business card and distributed to potential employers.
The algorithm on their “Jobs” tab shows openings with a short description and the skills that are required for relevant candidates. The candidate needs to score well in the screening assessment tests (Normally 2-4 questions) before the app allows them to contact the employer.
After the candidate successfully connects with the recruiter, the company claims to complete the hiring process in less than 48 hours. This way the job-seekers can not only find jobs but also gigs relevant to their skills.
To date, Apna witnessed over 200 million professional conversations and 170 million interviews, with maximum interviews happening in Metro cities and the tier-2 cities like Jaipur, Lucknow, Ahmedabad, Patna, and Ranchi.
The platform also consists of ~70 communities called “Groups” for skilled professionals like beauticians, carpenters, painters, and telemarketers who have been introduced to the platform.
From a user perspective, this feature assists Blue & grey collar workers to access jobs opportunities, collaborate with others and learn new skills.
But if you see it from a Business perspective, this feature makes it easier for the company to retain its users for the long term. (More on this later).
To put it into context, Apna is building a scalable networking infrastructure, which doesn’t exist in the market yet, that will help these workers to connect with the right employers and secure jobs.
Why Investors are so interested in Apna’s model?
The 28-month-old startup scaled quickly and its growth numbers reflect this.
However, Apna isn’t first in the market. Startups such as Betterplace, work India, Vahan, and Spayee were already present in the same market as Apna.
So what led investors to bet on this pre-revenue startup? Let’s understand this with a few pointers:
Big enough market: India has over 300 million blue-collared workers, and this number is growing with the addition of around 7-8 million new college graduates to the workforce every year, 60% of which lack employability skills and end up joining the blue/grey-collar workforce.
The falling number of Covid cases, lifting of restrictions and a pickup in economic activity led to higher demand for Blue-collar manpower.
According to BCG's report 'Unlocking the Potential of the Gig Economy in India,' roughly 2.4 crore new jobs could be created in the gig blue-colour space by 2028, with this number expected to rise to around 9 crores by 2028.
The same report talks about the E-commerce and logistics sectors being the biggest job generators in the gig blue-collar space right now. While sectors like retail, healthcare, home services, and fintech are not far behind in generating job opportunities.
Nimrit’s entrepreneurial background: The background of the founder is an important factor to raise big investments, especially when the startup is in the pre-revenue stage.
Nirmit Parikh loves solving problems from a very young age. The serial entrepreneur founded his first company Income Technologies at the age of 21. He was among the first to develop an automatic dam control system that regulates river water levels to monitor floods in India.
His next venture Cruxbot came up in 2012, an AI solution that can read and summarize web content. Cruxbot was acquired by Kno and was further acquired by Intel. This acquisition chain helped Nirmit to become the Director of Data Analytics at Intel Education.
Being a third-time founder, Nimrit has a proven track record to navigate through many challenges involved in starting a company such as finding PMF, Building a team, Scaling the company and others.
Multiple in-app Network effects create high switching costs: If you're wondering what a network effect is, it happens when your product increases in value the more people use it.
Once the network effect is been built in a product like Apna, it would be really hard for the competitors to break the flight, making the platform further defensible. Let’s understand the existing network effects on the Apna platform:The first network effect in the platform is a two-sided one similar to uber: More candidates lead to more jobs and more jobs bring more candidates.
The second flywheel I saw is the professional network they create for these candidates (named “Groups”), where people from similar fields can speak to each other, just like on LinkedIn.
And the third level of network effect that happens on Apna is the Data network effect. Where the user generates tons of content in the form of posts, images & videos. The user earns “Claps” on their posts that will help them to get win Silver Medal, Gold Medal, Dimond Medal, and Influencer Medal. These medals help users to increase connections, attract employers & get job referrals.
Not being just a “Job discovery” platform: Another reason behind Investors’ trust in Apna is their vision of becoming the “blue-collar version of LinkedIn for India”.
Generally, you’ll see Job discovery platforms focused solely on jobs which slowdown company growth in the long term as users looked for jobs only once or twice per year.
Whereas Apna’s Networking feature is helping them to add new users quickly and retain old ones even after getting placed. These articles communities have become a space Where Telecallers shares their learnings to crack HR interview, beauticians showcased their hair designs to their peers and so on.
Apna claim’s that out of 22 million users on the platform, 16 million are building networks either by posting in groups, commenting on the posts or having 1-on-1 conversations.
Is Apna going to succeed?
There is a massive opportunity for Apna to upskill Blue-collar workers on its platform. The app can leverage its “Groups” feature to launch mini learning programs and tie up the learning outcomes with job outcomes to motivate workers on the platform to upskill themselves.
Furthermore, The rich profile data of workers on the platform may unlock relevant opportunities to offer financial services such as Lending, saving services and Insurance packages to blue-collar workers.
Giving workers access to capital in times of need would strengthen both the core value proposition and the stickiness of the platform.
Looking at its current growth trajectory, Apna is on track to become India’s largest blue-collar recruitment platform but the road ahead will not be easier and paved with challenges:
These workers don’t like to spend months upskilling themselves. Instead, they prefer to get a job first and then learn the required skills on the side. How Apna will give them relevant infrastructure and time for learning? And Will it be able to monetize these upskilling programs?
The majority of Blue-collar workers comes on the platform to find paid work/job. They may not care about “Networking” & other features on the app. How will Apna retain these users on the platform, who will leave the app after finding a suitable job?
Since Apna is just a lead generating platform and doesn’t track placed candidates’ numbers, how do they ensure that candidates are being placed successfully?