Funding troubles hit start-ups’ CXO hiring
Start-up funding dropped by 46% in the quarter ended March compared with the preceding three months, with the number of deals slipping 31% quarter-on-quarter
New Delhi: In 2014 and 2015, barely a week went by without a high-profile hiring announcement by an Indian start-up. Senior executives at Silicon Valley blue bloods, top Indian companies, and global consulting firms were being snapped up by people- and profile-hungry start-ups. And it used to take around 45-60 days to fill a position at the CXO (chief anything officer) level, say people in the executive search business.
Now, they add, it could take five, even six months. The start-up ecosystem in India circa 2017 is very different from that in the go-go years. Venture capital firms have turned off the tap.
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According to Start-up Deal Report Q1 CY2017, published by News Corp VCCEdge in May 2017, start-up funding dropped by 46% in the quarter ended March compared with the preceding three months, with the number of deals slipping 31% quarter-on-quarter.
Most companies are searching for profitable business models and trying to cut costs to rein in mounting losses. The power balance, the head hunters add, has shifted to the candidates.
This, despite companies being generous with their offers to potential recruits.
According to two people aware of the matter who did not want to be named, Flipkart is still looking to hire a chief financial officer (CFO), a position that has been vacant since October 2016, when Sanjay Baweja resigned from the post.
Flipkart did not respond to a detailed questionnaire e-mailed on 26 June.
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Advertising technology firm InMobi has seen top CXO exits despite turning profitable in 2016. These include that of its chief technology officer Mohit Saxena, who left the firm in the middle of June. InMobi has also not been able to fill some key posts such as that of CFO, and vice-president (technology), which have been lying vacant for more than a year now.
Piyush Shah, chief product officer at InMobi, says the company will close the opening for CTO in the next six months. It recently promoted an existing employee to the post of vice-president (engineering), Shah added.
At online food delivery start-up Swiggy, some key positions such as CFO and chief operating officer have been vacant for about 18 months now. A Swiggy spokesperson said it is “continuously looking to strengthen the team, including leadership”.
Meanwhile, candidates are also seeking more cash (instead of stock), and insisting on severance clauses, said a recruiter. “Given the current state of affairs , candidates now want rewards in the hand,” said Avdesh Mittal, managing director-digital practice, Asia Pacific, at executive search firm Korn Ferry.
“Executives want greater commitment from the employer…they are seeing the value of severance pay in their compensation structure now,” Mittal added.
The only instances where candidates prefer stock over cash is where there is a very real chance of a company going public soon, added Ashish Sanganeria, partner at executive search firm Longhouse Consulting.
“(However), The game has changed at early-stage firms, where, unlike 2-3 years back, people are not taking a cut on cash (in lieu of stock),” he said.
Opportunities that were previously only to be found in start-ups are now increasingly available in established companies, said another recruiter.
“This provides talent in these industries with the same canvas they would get at an e-commerce player…may be in more familiar waters..,” said Shailja Dutt, founder and chairperson of executive search firm Stellar Search.