We are worried about a slowdown in IT: Naukri CEO Hitesh Oberoi
New Delhi: Over the last two decades Naukri.com, has emerged as a leading name in the job matching space in India. In an interview, Hitesh Oberoi, chief executive of Naukri and its holding company Info Edge (India) Ltd, talks about how Naukri has grown as a business and India’s changing jobs scenario. He also speaks about how Info Edge is growing from being the holding company for a hiring firm into an investor role and if it would invest further in Zomato. “If we see an opportunity to acquire a company and own 100% in it, we will do (it),” Oberoi says. Edited excerpts:
As a leading jobs match maker, how do you see the jobs space shaping up in India?
What we’ve seen for the last two years is growth reviving but it is not secular – not across sectors. Growth for the last six to eight quarters has been driven largely by IT sectors, Internet services, e-commerce. Now, we see banking and financial services also picking up, pharma has also been strong. Services have been doing okay. We are worried about a slowdown in IT, and IT companies are talking about it.
How has Naukri changed as a business–from one dot com boom to another?
When we got funded in 2000, after two years of our existence, there were only two million Internet users in the country. Nobody even understood how the Internet could be used for hiring. So what we did in the first few years was to educate, acquire and train customers on how to use Naukri for hiring.
In the last few years, Internet has become mainstream. Some 350-400 million people are online. Smartphones are omnipresent. Companies now hire more than 50% via online. They must be using Naukri, other job boards, their own websites, a referral hiring programme, social media, etc.
We have seen a massive shift from print hiring 15 years ago to bulk hiring through online. And this will only accelerate. We are trying hard to enable e-hiring for companies. Naukri is offering a career site management service where we power company career sites through our software.
Is the career site management service helping to diversify your portfolio?
We saw this coming a few years ago. We have 65,000 corporate customers–firms big and small. We realized that they still don’t hire completely from Naukri. They still want to use their career websites, referral hiring programmes. So, we started diversifying to these areas. We now have a referral hiring manager and have facilities which help companies run their referral hiring programme through a portal.
We see this as an opportunity for us to develop new revenue streams over time. Today, single digits in percentage terms of revenue comes from these products but it could become substantial in the coming 4-5 years. Naukri is a Rs500 crore business, and even 5% of that is a significant number...(it) can become double digit in five years.
Earlier, Naukri was the flagship brand, but now Info Edge is becoming a venture capital kind of play with several investments. Is Info Edge growing as an investor rather than a hiring company?
Naukri is still maybe 70% of our revenue, but there are other operating businesses which are now growing rapidly and are becoming bigger. For example, 99 acres did about Rs115 crore revenue last year and is growing at a faster rate than Naukri. Jeevansathi has turned profitable. Shiksha business is also breaking even. These three businesses, on a quarterly basis are generating a revenue of about Rs55-60 crore for us, bigger than most of the Internet companies out there. So, we are fairly bullish that going forward these businesses will become big.
And this does not include Zomato. Outside, we have invested in 10 or 12 companies, and some of these will also do very well.
We see ourselves as an operating company. We have these three-four verticals in the company...they bring us cash and enable us to invest outside. Hopefully the outside investments will become large and increase our overall top line.
I would not say that we are a VC player, but yet if there is a good opportunity, we don’t mind investing outside. But we don’t have a fund like any other VC would have...
We look at opportunity, if we see more opportunity in the internal business, we’ll invest there and similarly for outside. If we see an opportunity to acquire a company and own 100% in it, we will do (it).
You have invested around Rs860 crore, do we see this growing by certain percentage over next three years?
For example, we own 50% of Zomato and that’s a lot. We don’t go by targets, we go by opportunities. If we see an opportunity, we don’t mind whether it is inside the company or whether it is an acquisition opportunity or an investment.
Yes we have some basic rules, like we don’t like to invest in non-Internet businesses, we try and invest mostly in India-focused business, restrict ourselves to the consumer Internet space, we like businesses inside our market places. These are the broad guidelines which we follow while investing, but we are open.
So Naukri may become much less than 60-70% of the business?
If it happens because other businesses are growing then its fine, but if Naukri is not growing then that’s a problem. We actually see a lot of opportunity in the job business, because we are very diversified and working on different things. And who knows if GDP growth picks up-for every 1% GDP growth, our business (Naukri) grows 8-10%.
You spoke about Zomato, are you investing further in them?
Zomato has had a very good run for the last few months, they have cut down their burn immensely. Revenue has gone up and they are sitting on a lot of cash. I would say they are comfortable today but tomorrow they’ll try to raise money as they will need it for growth and opportunities, we’ll see at that point of time.