Why We Invested in CBREX?

Over the past couple of years, the way we work has undergone several paradigm shifts. From the kind of jobs being created in the market, to workplaces going remote to cross-border hiring; these changes have caused enterprises as well as candidates to fundamentally rethink the way they work. HR-Tech has consolidated its position as a resilient force in the face of Black Swan events such as the pandemic, geo-political tensions and the ongoing war.?

Korn Ferry predicts a talent deficit of 85.2 million workers globally by 2030. The shortage already stands at 40M workers. Sectors such as TMT (technology, media and telecommunications) alone have a shortage of 4.3 million. The impact of this talent crunch will have far-reaching implications on the ability of nations to retain market share in their respective industries. Corporations will have to re-engineer their locations and expansion plans to regions where supply is accessible. Similarly, governments will need to empower their nation’s workforces to be able to retain talent which will in turn defend their nation’s GDP’s.

The US for instance faces one of the most alarming labor crunches across the world. One of the key factors driving this is their aging population with 10,000 baby boomers reaching retirement age each day for almost the next two decades. In fact, US job vacancies hit a record high in 2021 which exceeded 6 million openings per month. In terms of categories of workers, the US faces the biggest shortage with respect to highly skilled workers with a deficit expected to cross 6.5 million people by 2030 (Korn Ferry). Overall, the rising demand and declining supply will also adversely affect the labour force participation rate. The labour force participation rate which stood at 62% in 2020 is expected to dip to 60% in 2030.?

The situation for other developed economies remains bleak as well. Among the EU nations the UK & Germany are projected to be the worst hit. With a projected deficit of ~5 million workers by 2030 Germany may fall short of generating revenue equivalent to 15% of its total economy. This shortage will be largely driven in the financial and business services sector which accounts for ~25% of the German economy. Similarly, the adverse effects of these shortages will be felt across other economies ranging from South America to Asia to the Middle East.

Market Size & Funding

The global HR services industry size in 2022 is estimated to be $623B (an increase of 11% since 2021) as per Ranstad's 2022 Annual Report. 440+ deals were tracked in 2022, accounting for a total investment of $12.4B. Moreover, the space experienced a lot of consolidation and remained highly acquisitive with 160+ M&A deals in the space (56% increase as opposed to 2021 which stood at 103 deals). This goes on to prove robust demand for such solutions and increasing transformation of the workplace.?

Across the spectrum of segments within HR-Tech, Talent Acquisition remained the top-funded segment which attracted $4.5B across ~175 deals which accounted for 37% of the total funding in 2022. This is attributable to the fact that? candidate sourcing forms the most central and valuable part of the HR-Tech value chain. In today’s environment solutions that enable hiring and candidate acquisition at scale are solving the largest piece of the puzzle and as a result possess the largest potential to scale. The lion share of capital within talent acquisition went to companies in the cross-border recruitment category such as Velocity Global ($400M), Remote ($300M), Globalization Partners ($200M), Atlas ($200M), etc.?

Why We Invested in CBREX?

The way enterprises acquire talent today is broken. They are forced to engage multiple small and mid-sized agencies charging as high as 20-30% of the candidate's CTC to fulfil their requirements. Despite their hiring spends, the experience remains fragmented with stretched timelines and a long-tail of these vendors each being able to fill only a few positions each. It often takes long for these job postings to receive qualified and curated candidates.?

On the other hand, these agencies struggle to discover demand and suffer extreme cyclicality in their businesses leading to unpredictable cash flows and an inability to scale efficiently. A typical enterprise hires 70% of its employees through agencies, 20% via job boards and 10% through internal referrals. Enterprises are constrained by the number of agencies they can work with at any point in time due to the manual nature of work dealing with CVs shortlisted by them and thereafter scheduling with candidates.?

This is where CBREX comes in. CBREX seeks to disrupt cross-border recruitment by enabling mid-market enterprises in the US and globally to get access to candidates at scale. It is set up as a B2B platform, on the supply-side it has tie-ups with recruiting agencies who use the platform to view job openings and upload CV’s. On the other hand, the demand side comprises enterprises that post job openings on the platform. CBREX’s model of having recruiters on one end, enables the platform to have access to a large supply pool at a low acquisition cost.?

Speed, Scale and Quality is their client promise. The entire workflow of a Talent Associate (TA) is digitised by the CBREX platform, including ATS integrations, removing the need for multiple CV sources and candidate touch points. Several of these features seamlessly flow into the newly launched CTalk Mobile App as well.?

• CBREX provides enterprises with a TAT from the date of job activation to the date of release of a first offer of just ~10 days. The speed offered by their platform significantly boosts internal recruiter productivity.?
• CBREX brings down costs per agency hire by 30-70% for enterprises. Recruitment agencies typically charge 20-30% of? the first year salary of a placed resource. For instance, on a CTC of $100K this amounts to $20,000- $30,000. CBREX’s can do so at ~$5,000 offering a significant advantage without the additional hassle of managing multiple vendors.?
• A client on the CBREX platform accepts ~80%? of all CVs posted indicating high quality CV curation. Enterprise recruiters that otherwise made 3 -5 offers per month are now able to ramp that up to 20- 25 offers.?
• 3,000+ CV’s are uploaded on the platform every month. Moreover, long-tail mid-market firms who struggle to capture supplier attention due to their limited size, are now able to fill positions efficiently given CBREX’s base.?
• A typical talent associate / recruiter in a company spends an average of 30-40 mins daily on the CBREX platform posting jobs, shortlisting CVs and scheduling interviews with candidates.

Gautam Sinha and his co-founders Sanjeev Punwani , Divya Chethan and Karunjay Anand come with extensive experience in IT recruitment. Gautam had previously founded TVA Infotech, a player in the IT services recruiting space which he ran from 2001 - 2008 after which it was acquired by the Allegis Group as its India-entry acquisition. He then ran TVA Allegis up until 2010 which was the new entity formed post-acquisition. His cofounders have worked with him previously at TVA or the Allegis group and also come with deep expertise in the recruitment space.?

Given the enormous market opportunity, promising traction and rapid client acquisition as well as a world-class team, we are stoked to partner with CBREX on their journey. We are excited about CBREX scaling to become the one-stop full-stack platform for an enterprise to solve all their hiring needs. We look forward to the road ahead as CBREX takes the recruitment world by storm client by client and candidate by candidate! To learn more about Gautam’s backstory and CBREX’s journey do tune in to our podcast here.?

If you are a founder building in the cross-border space taking Indian products to the world. Reach out to me at [email protected].