Layoffs usually garner attention and sympathy for the workers affected, but rarely does anyone talk about what happens to the employees who are sometimes also asked to leave when companies decide to downsize. Indeed, technology companies cut up to half of their recruitment teams when they lay off people en masse in 2022 and 2023.
Paraform, a recruitment platform aimed at startups, believes there is an opportunity to tap into the pool of laid-off recruiters who have since launched to start their own business and help startups acquire talent and access a wider network talents. To fund this effort, the company recently raised a $3.6 million round led by ONE*a venture capital firm founded by Kevin Hartz — the co-founder of Eventbrite and Xoom and an early investor in Airbnb.
“During the wave of tech layoffs in 2022 and 2023, we saw 100,000 recruiters get laid off, leading many employers to go independent and start their own recruiting business,” said John Kim, CEO of Paraform, in an exclusive TechCrunch interview. “This has left many independent recruiters with valuable skill sets and high-quality networks available and open to new ways of working.”
“To date, we have thousands of recruiters on the platform and have supported more than 200 companies in recruiting for roles,” he added.
The startup charges a listing fee (subscription fee) for posting jobs on the platform and a success fee when a hire is made. “The listing fee ensures buy-in from startups to the two-way market and a commitment to the recruiters they work with,” Kim said.
In addition to early- and late-stage startups, Kim said the platform is also working with larger internal talent pools to fill challenging roles. “More than 50% of our clients have great in-house talent pools, but continue to post roles on Paraform. They are able to leverage recruiting networks without having to hire full-time recruiters and can flexibly scale hiring up or down,” explained the company’s CEO.
The new funding, which brings Paraform’s total capital to $5 million, comes a year after Paraform’s pre-seed raise in March 2023. Kim said that since the pre-seed round, Paraform’s revenue have grown 10x, onboarded more than 100 new clients and grown their team. The company generated more than $1 million in revenue with a three-person team in its first year of operation, he added.
Other investors in the first round include DoorDash co-founder Evan Moore and leaders at companies such as Affirm, Hightouch, Palantir and Ramp. Previous backers Primer Sazze Partners also participated.
Paraform will use the new capital to expand in the US and hire more engineers and operators to serve the growing demands of its customers. It also plans to enter new countries and markets. They are now a team of four and hope to double this year.
A screenshot of the Paraform Recruitment Management screen. Image Credits: Paraform
“We’ve supported a few clients in the EU, Korea and Australia and the way the companies worked with the headhunters was seamless and worked really well. We are excited to expand globally.”
The startup has launched an enterprise product and plans to expand its platform to cover roles beyond software engineering and marketed startup jobs.
“We’ve already deployed in research, science, manufacturing and defense roles because of the demand we’re seeing from potential customers,” Kim said.
Paraform believes recruiting is still “a human-to-human process” and wants to enhance that human element by using technology like artificial intelligence to help recruiters and startups make recruiting easier on the platform.
Kim said AI will allow recruiters to understand what hiring managers are looking for. AI technology will allow them to summarize and provide “the most common reasons why they’ve passed on a candidate, ultimately helping recruiters better understand how to identify the best candidates.”
