Layoffs often draw attention and sympathy for affected employees, but few talk about what happens to recruiters, who are sometimes asked to leave when companies decide to lay off employees. In fact, tech companies slashed half of their recruiting teams during mass layoffs in 2022 and 2023.

Paraform, a recruiting platform for startups, saw an opportunity to help startups find talent and tap into a wider talent network by leveraging laid-off recruiters who later started their own businesses. To fund this effort, the company recently raised a $3.6 million seed round led by A*, a venture capital firm led by Kevin Hartz, co-founder of Everbrite and Xoom and the first investor in AirBnB Founded.

“In the wave of tech layoffs in 2022 and 2023, we saw 100,000 recruiters being laid off, prompting many to go independent and start their own recruiting businesses,” Paraform CEO John Kim said in an exclusive interview with TechCrunch “This provides many independent recruiters with valuable skills and a high-quality network and an openness to new ways of working.”

“To date, we have thousands of recruiters on the platform and have supported more than 200 companies in recruiting positions,” he added.

The startup charges a listing fee (subscription fee) when a job is posted on the platform and a success fee when a hire is made. “The listing fee ensures startups’ recognition of the two-sided market and their commitment to the recruiters who work with them,” King said.

In addition to early-stage and later-stage startups, Kim said the platform also works with a larger team of internal talent to fill challenging roles. “More than 50% of our clients have great internal talent teams, but they continue to post jobs on Paraform. They are able to leverage a network of recruiters without having to hire a full-time recruiter and have the flexibility to scale their hiring up or down,” the company said explained the CEO.

The new funding brings the total funding Paraform has raised to $5 million and comes one year after Paraform raised a pre-seed round in March 2023. Since its pre-seed round, Paraform has grown its revenue 10x, hired more than 100 new customers and expanded its team, Kim said. He added that the company’s team of three generated more than $1 million in revenue in its first year of operation.

Other investors in the seed round include DoorDash co-founder Evan Moore and leaders from companies such as Affirm, Hightouch, Palantir and Ramp. Previous backer Primer Sazze Partners is also involved.

Paraform will use the new funding to expand in the U.S. and hire more engineers and operators to meet its growing customer demand. It also intends to enter new countries and markets. Now it’s a team of four and hopes to double that this year.

Screenshot of the Paraform recruiter management screen. Image Source: pallav

“We have supported a number of clients in the EU, South Korea and Australia, and the way these companies work with executive search firms is homogeneous and works very well. We are excited to expand globally.”

The startup has launched an enterprise product and plans to expand its platform to cater for roles beyond software engineering and startup go-to-market work.

“As we see demand from potential customers, we have expanded into research, science, manufacturing and defense sectors,” Kim said.

Paraform believes recruiting is still “a very human process” and wants to help recruiters and startups make recruiting easier on the platform by using technology like artificial intelligence to enhance the human element.

Artificial intelligence will allow recruiters to understand what hiring managers are looking for, Kim said. AI technology will allow them to summarize and provide “the most common reasons why they abandon candidates, ultimately helping recruiters better understand how to identify the best candidates.”

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