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techTribe, backed by Canaan Partners, is now exploring options like finding a strategic partner or a buyer.
The business model for online recruitment based on referrals is not “working out”, techTribe CEO and Founder Rohit Agarwal admitted in an interview to VCCircle. The company is now exploring options like a strategic partner or a buyer.
San Francisco and New Delhi-based techTribe was founded by serial entrepreneur Rohit Agarwal, in 2006. Before starting techTribes, Agarwal was co-founder and VP of marketing and business development at Webify Solutions, which got acquired by IBM in July 2006.
The company hoped to make money by becoming a referral job portal. It had received an undisclosed amount of funding from Canaan Partners, US-based Miven Venture Partners and The Entrepreneur Funds in 2007.
“The model for referral recruitment as we had planned is not working out,” said Agarwal. A couple of months ago multiple sources had told VCCircle that the portal was in the market looking for a strategic partner or a buyer. When contacted then, Agarwal denied any such moves, although he admitted that certain strategic development was in the offing.
techTribe had expected online model to help in automating the referrals, which would help in scaling up the business. But referrals continue to be a manual process, and thus making it a less scalabale business. Now techTribe has stopped doing referrals, Agarwal said.
“We are thinking about alternatives and we will figure it out in the next couple of months,” said Agarwal. When asked about the options that techTribe has, Agarwal said they are the ones that any firms will have when faced with such challenges. “You look at a strategic buyer, a strategic partner or you basically say it didn’t work out,” said Agarwal.
techTribe has about half a million users. Its revenues come from companies posting their jobs which subsequently get referred by members on its network. Another revenue stream is from sponsorships of various ‘tribes’. Agarwal said that techTribe has 30-odd major communities, and hundreds of user generated ones. It’s not known how much revenues the company clocks currently.
techTribe is focused on IT/ITES segment with 60% of its members coming from that sector. The hiring in IT/ITES sector has been affected due to a global economic slowdown. Many firms have also started cutting jobs as their projects get shelved and delayed, affecting techTribe’s business.
However, the referral recruitment has advantages such as the quality of employees that firms get through this method is expected to be much higher. Also, referral method can help recruitment of mid- and senior-level positions. But techTribe has not been able to translate this into a scalable business.
The recruitment referral space has seen a number of players in the past couple of years, especially after techTribes was launched. Some of them are Yellojobs, Reffster and Technopax. The fate of these websites remains to be seen. Other such websites which depend on referral revenues are Linkedin and Brijj, while the latter is owned by Infoedge (Naukri).
Agarwal said that there are several lessons to be learned from this episode. He said only mass internet plays can work in India, not niche plays. “Unless it’s a service that is a must have, it doesn’t work in Indian web,” said Agarwal.
This story has been provided by our content partner VCCircle