Layoffs often garner sympathy for those affected, but the impact on recruiters is often overlooked. In 2022 and 2023, tech companies slashed their recruitment teams in half during massive layoffs.
Paraform, a recruitment platform focusing on startups, sees potential in the pool of laid-off recruiters who have since started their own businesses. They aim to help startups access top talent and widen their talent network. To fund this venture, the company recently received a $3.6 million seed round led by A*, a venture capital firm founded by Kevin Hartz, co-founder of Everbrite and Xoom and the first investor in AirBnB.
“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,” said 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 added that the platform currently has thousands of recruiters and has helped over 200 companies find top talent.
The platform charges a listing fee for job postings and a success fee when a hire is made. According to Kim, this ensures commitment from startups and recruiters to the two-way marketplace.
Besides working with early and late-stage startups, Paraform also partners with larger in-house talent teams to fill challenging roles. Kim explained, “More than 50% of our customers have great in-house talent teams, but they continue to post roles on Paraform. They’re able to leverage recruiter networks without having to hire full-time recruiters and can flexibly scale hiring up or down.”
The recent funding brings Paraform’s total raised capital to $5 million, a year after their pre-seed raise in March 2023. Kim shared that since the pre-seed round, their revenue has increased by 10x, they have gained over 100 new customers, and expanded their team. The company generated over $1 million in revenue with only a three-person team in their first year.
Other investors in the seed round include Evan Moore, co-founder of DoorDash, and leaders at companies like Affirm, Hightouch, Palantir, and Ramp. Prior investor Primer Sazze Partners also joined the round.
To support their growing customer demands, Paraform plans to use the new capital to expand across the U.S., hire more engineers and operators, and move into new markets. Currently, the team has four members but aims to double that this year.
“We have supported a few customers in EU, Korea, and Australia, and the way the companies worked with headhunters was homogenous and worked very well. We’re excited to be able to expand globally,” stated Kim.
The startup has recently launched an enterprise product and plans to broaden their platform to cater to roles beyond software engineering and go-to-market jobs at startups.
“We’re already branching out into research, science, manufacturing, and defense roles due to the demand we’re seeing from potential customers,” Kim revealed.
Paraform believes that recruitment is still “a very human-to-human process” and aims to enhance that element by utilizing AI technology on their platform to make hiring easier.
Kim said that AI will enable recruiters to understand the needs of hiring managers and provide a summary of the most common reasons for passing on a candidate, ultimately helping recruiters identify the best candidates.
