The great startup CXO hunt: companies beef up top deck as funding winter thaws and IPO dreams take shape

In the last three months alone, early and growth-stage startups have hired more than two dozen top executives, data compiled by Mint shows. Some of these are Atlys, Pepperfry, Porter, The Sleep Company, Neysa, Hero Vired, Yubi, Securonix, Lightfury, Niraamaya Life, Vidyakul, ThoughtSpot, Groyyo, Geniemode and Wellbeing Nutrition.

The roles range from chief executives, chief financial officers, chief technology officers, chief business officers, business heads, and heads of product and marketing.

“Compared to last year, the number of open mandates in the startup sector has increased by 22% for us," said Pranshu Upadhyay, regional director and India head, technology hiring, at Michael Page, a global headhunting firm.

“The early and mid-tier startups are often run by founders, but when they want to scale up, the search for a professional CEO starts. That’s one of the reasons for the higher number of CXO hunts now in the sector," Upadhyay said.

However, while the posts were closed in two to three months in the previous period of easy money and hiring frenzy, currently the process takes more than five months, said Upadhyay. Startups are hiring with the expectation of more innovative and strategic positioning and a better inflow of business since geopolitical issued have not affected this industry’s sentiment, he added.

Mature startups such as Darwinbox, UpGrad, CarDekho, Licious, Razorpay, Perfios, Betterplace, Dehaat, Razorpay, and Meesho have also been beefing up their top decks this year.

“The lull is easing and startups, tech and product firms have started to recruit, and the numbers in the next six months will be 40% more than six months ago," said Shiv Agrawal, managing director of ABC Consultants, a head-hunting firm.

“The middle-order or just-born startups are recruiting senior talent from other startups or the second-in-command from more established companies," Agrawal added. “The compensation is typically a couple of crores of rupees, with a high percentage of stock options."

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‘Adding muscle, trimming fat’

Attracting talent has become easier for mature startups with reduced cash burn and which are either profitable or close to profitability. Many of the above-mentioned companies have seen industry veterans join as chief financial officers, chief marketing officers, and chief human resource officers.

Among such top executives are Kamaljeet Singh, formerly with Rebel Foods and Reliance Industries Ltd, who joined The Sleep Company as chief human resources officer in October, and Ketan Karkhanis, formerly with Salesforce, who joined ThoughtSpot as chief executive officer in September.

The rebound in hiring comes after a string of layoffs had made experienced talent wary of the startup sector, but that’s changing now.

“As startups are growing past the late stage and entering their IPO preparation processes, they are evolving their organizational structures to strengthen the foundations for their next phase of growth," said Pranav Pai, managing partner, 3one4 Capital, a homegrown venture capital firm.

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“Their boards are also more supportive of these evolutions, given that the scale of these businesses demands a levelling-up of stewardship. This is a sign of the maturity of the founding teams and their leadership, and their practical approach to adding muscle while trimming the fat," Pai said. “The intent is to make their companies better prepared for new challenges, and their ability to make important personnel decisions reflects a mentality maturation."

Meanwhile, companies weighing a public market debut such as Zaggle, Practo, and Meesho have assembled strong director boards as they try to get their governance and structure in place.

In August, Meesho announced appointing four independent directors to its board, saying they had extensive experience across domains such as technology, finance, entrepreneurship, and governance practices, and would play a key role in guiding the company’s key initiatives.

Corporate veterans such as Surojit Chatterjee, Kalpana Morparia, Rohit Bhagat, and Hari S. Bhartia joined Meesho’s board as independent directors.

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