Paraform, a startup dedicated to bridging the gap between startups and recruiter networks, has secured a substantial $3.6 million in its seed funding round.

Paraform, a startup facilitating connections between startups and recruiter networks, secures an impressive $3.6 million in seed funding. The investment highlights confidence in Paraform's mission to streamline recruitment processes and foster collaboration within the startup ecosystem, propelling its growth and impact in the industry.

Layoffs often draw attention and sympathy towards affected employees, but the fate of recruiters, who may also face job cuts during company downsizing, is seldom discussed. Tech firms, particularly during the layoffs of 2022 and 2023, trimmed up to half of their recruitment teams.

Recognizing an opportunity to support laid-off recruiters who have transitioned to entrepreneurship, Paraform, a recruitment platform catering to startups, aims to leverage this pool of talent. By assisting startups in sourcing talent and accessing a wider talent network, Paraform seeks to fill this gap in the market.

To fuel this initiative, the company recently concluded a seed funding round, securing $3.6 million. The round was led by A*, a venture capital firm established by Kevin Hartz, known for his roles as the co-founder of Eventbrite and Xoom, as well as being Airbnb's first investor.

"During the 2022 and 2023 wave of tech layoffs, we saw 100,000 recruiters laid off, driving many recruiters to go independent and start their own recruiting business," revealed John Kim, CEO of Paraform, in an exclusive interview with TechCrunch. "This has left many independent recruiters with valuable skill sets and high-quality networks available and open to new ways of working."

Kim further stated, "To date, we have thousands of recruiters on the platform and have supported more than 200 companies in hiring for roles."

Paraform operates on a business model where it charges a listing fee (subscription fee) to publish 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 marketplace and a commitment to the recruiters they’re working with," explained Kim.

Kim highlighted that besides early- and late-stage startups, the platform collaborates with larger in-house talent teams to address challenging roles. "More than 50% of our customers boast great in-house talent teams, yet they consistently post roles on Paraform. They're able to harness recruiter networks without the need to hire full-time recruiters, allowing them to flexibly scale hiring up or down," explained the company CEO.

This latest funding round, bringing Paraform's total capital raised to $5 million, follows a pre-seed raise in March 2023. Kim noted that since the pre-seed round, Paraform's revenue has skyrocketed by 10x, with over 100 new customers onboarded and a significant expansion of its team. In its inaugural year of operations, the company generated over $1 million in revenue with just a three-person team, Kim added.

In addition to A*, other prominent investors in the seed round include DoorDash co-founder Evan Moore, as well as leaders from companies such as Affirm, Hightouch, Palantir, and Ramp. Previous investor Primer Sazze Partners also joined the round.

With the fresh infusion of capital, Paraform plans to accelerate its expansion across the United States. It aims to bolster its team by hiring more engineers and operators to cater to the increasing demands of its growing customer base. Furthermore, the company intends to explore opportunities in new countries and markets. Currently comprising a team of four, Paraform anticipates doubling its workforce over the course of this year.

"We have supported a few customers in the EU, Korea, and Australia, and found that the approach to working with headhunters was consistent and highly effective. We're thrilled to expand our reach globally," remarked Kim.

The startup has recently introduced an enterprise product and intends to broaden its platform to encompass roles beyond software engineering and go-to-market positions at startups. "We're already diversifying into research, science, manufacturing, and defense roles in response to the demand from potential customers," Kim added.

Paraform emphasizes that recruitment remains fundamentally a human-to-human process and aims to augment this human element by leveraging technology such as AI to facilitate easier hiring for recruiters and startups on the platform.

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Kim highlighted that AI will empower recruiters to better comprehend the requirements of hiring managers. Through AI technology, recruiters will be able to summarize and present the most prevalent reasons why they may have rejected a candidate. This functionality will ultimately assist recruiters in gaining deeper insights into how to identify the most suitable candidates for specific roles.

Source: techcrunch