Darwinbox Secures $40 Million from Canada’s OTPP to Fuel AI Innovation and North American Expansion

Hyderabad, August 14, 2025 – Darwinbox, a Hyderabad-based AI-powered human capital management (HCM) platform, has raised $40 million from Teachers’ Venture Growth (TVG), the late-stage venture arm of Canada’s Ontario Teachers’ Pension Plan (OTPP), announced on August 14, 2025. This investment, following a $140 million round in March 2025, values the company at approximately $1 billion and will accelerate its North American expansion and advancements in agentic AI, positioning Darwinbox as a global leader in HR technology. The funding, secured through a mix of primary and secondary transactions, underscores investor confidence in Darwinbox’s mission to redefine enterprise HR with AI-first solutions.

Strategic Funding: A Boost for Global Ambitions

The $40 million infusion from TVG, part of OTPP’s $269.6 billion portfolio, will support Darwinbox’s aggressive growth in North America, where it has tripled its business year-on-year since entering the market in 2022. The company serves over 1,000 enterprises and 4 million employees across 130 countries, including major clients like EXL, Virtusa, Nivea, WeWork, Zara, Starbucks, and Adidas. The funding will also enhance Darwinbox’s investment in agentic AI, notably its support for the Model Context Protocol (MCP), making it the first HCM platform to enable secure AI agent interactions.

This round follows a $140 million Series D raise in March 2025, led by Partners Group and KKR, bringing Darwinbox’s total funding to $320 million. TVG’s investment includes a stake acquired through primary and secondary transactions, offering early investors like Peak XV Partners a tenfold return on their 2019 investment. Avendus Capital served as the financial advisor for the deal.

Leadership and Vision: Redefining HR Technology

Founded in 2015 by Jayant Paleti, Rohit Chennamaneni, and Chaitanya Peddi, with Vineet Singh recently elevated to co-founder and CTO, Darwinbox has disrupted the HR tech space with its cloud-based platform. It streamlines recruitment, payroll, employee engagement, talent management, and analytics, competing with legacy providers like Workday and SAP SuccessFactors. The company’s AI-driven approach has earned accolades from Gartner and Forrester, with Darwinbox named the youngest HCM suite on Gartner’s Magic Quadrant and a Customer’s Choice for four years running.

Co-founder Jayant Paleti highlighted the partnership’s significance: “TVG’s expertise in scaling tech companies globally will help us build the next-gen HCM, AI-first and customer-centric.” Darius Vakil, Director of TVG in India, praised Darwinbox’s “easily customizable, AI-powered full-stack offering” and its adoption by global enterprises, noting TVG’s role in supporting its international growth.

Financial Performance and Market Impact

Darwinbox reported a 58% revenue increase to Rs 392 crore ($47 million) in FY24, with a net loss of Rs 191.82 crore due to heavy investments in AI and global expansion. The company targets a 50% revenue growth in FY25, aiming to surpass $100 million in annual recurring revenue by December 2025, driven by strong U.S. market traction. Its partnership with Microsoft, announced in 2024, integrates its HCM platform with Microsoft’s tools, enhancing employee experiences for clients like Starbucks, Cigna, and Crisil.

The funding strengthens Darwinbox’s position in the $30 billion global HCM market, where it competes with players like BambooHR and UKG. Its focus on AI-driven HR solutions aligns with industry trends, with enterprises increasingly adopting platforms to streamline workforce management. The company’s recent $10 million ESOP buyback plan further signals confidence in its growth trajectory.

Geopolitical and Industry Context

The investment comes amid U.S.-India trade tensions, with President Trump’s 25% tariffs on Indian imports (paused in July 2025) and calls to curb Indian tech hiring posing risks. However, India’s emergence as the top U.S. smartphone supplier and a key Indo-Pacific security partner, alongside its space achievements like the NISAR launch, bolsters its appeal to global investors like OTPP. TVG’s prior investments in Indian startups like Perfios, Mintifi, and Xpressbees reflect its confidence in India’s tech ecosystem.

On X, reactions are positive, with @ETtech noting the $40 million raise as a “big win for Indian SaaS,” while @GyanVardhan highlighted Darwinbox’s “3X North American growth” as a model for global expansion. However, @TechBit cautioned that profitability remains a challenge in the competitive HCM market.

Challenges and Future Outlook

Darwinbox faces hurdles in achieving EBITDA positivity, with losses reflecting its aggressive scaling. Competition from established players and the need for continuous AI innovation require sustained investment. Geopolitical risks, including potential U.S. policy shifts, could impact its North American plans. Nevertheless, the company’s robust investor lineup—KKR, Partners Group, Microsoft, Salesforce, and now TVG—positions it for success.

Looking ahead, Darwinbox aims to deepen its AI capabilities, expand in Southeast Asia and MENA, and strengthen its U.S. footprint, where it powers clients like Apollo.io. With plans to surpass $100 million in ARR by year-end, Darwinbox is on track to redefine HR technology globally.

Conclusion: A New Chapter for Indian SaaS

Darwinbox’s $40 million raise from OTPP’s TVG marks a pivotal moment for Indian SaaS, reinforcing its status as a global HCM leader. By leveraging AI and strategic partnerships, the company is poised to transform enterprise HR while navigating a complex geopolitical landscape. As India strengthens its global tech influence—from smartphones to space—Darwinbox’s ascent signals a bright future for innovative, AI-driven solutions from the subcontinent.