High Potential Startup #1: Apna
Blue collar jobs platform in India
At time of publication: Series B | Total Funds raised 93mn USD | Valuation 570mn USD
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Apna is a mobile-first jobs platform in India focused on blue collar workers.
Traditionally, the job platforms in India are Naukri.com (part of Infoedge) and LinkedIn. But they are more suited to white collar jobs rather than blue collar jobs. Blue collar jobs generally are posted in classifieds sites like Quikr jobs.
There is a gap in the market for a blue-collar focused mobile-first easy-to-use jobs platform that:
Aggregates multiple trustworthy low-skill blue-collar jobs in a preferred location
Provide flexible opportunities for additional monthly income
Apna solves this problem. The platform has garnered 10mn app users and claims to have facilitated 15mn jobs interviews per month. The app is available in multiple languages and features multiple blue collar job types like delivery persons, sales agents, painters, carpenters etc.
Why Apna has high potential:
Large TAM
Great Product with early indications of product-market fit
Strong defensibility via network effects and switching costs
Enormous Adjacent Market Opportunities
1. Large TAM (Total Addressable Market) and An important Problem
In India, the lower middle class forms the bulk of the working age population.
Source: Bain, World Economic Forum
There are more than 170 million blue collar workers in India by some estimates. And India desperately needs jobs. By various estimates, India needs to create between 4mn to 8mn jobs every year to absorb the incoming workforce but falls far short of that.
The pandemic has worsened the situation with many millions being pushed into poverty.
Source: Pew Research
It is blue collar jobs that are clearly available though they were among hardest hit in the pandemic. It is estimated that in the month of May 2021 around 1.3 million blue collar jobs were recently available - roles like delivery persons, field sales agents etc.
The scenario is not likely to change in the foreseeable future for the stage of development India is currently in and hence providing a large market for Apna to tap in.
2. Great Product - Mobile-First built for the target customer
The product is built for the blue collar worker. The product is simple to use and onboards the user fast. The time from ‘sign up’ to showing available jobs is done with a few taps in seconds.
The app prompts creation of a digital ‘visiting card’ upon sign up which is usually associated with employed graduates and is aspirational.
The app is available in vernacular Indian languages and the team will expand the languages available. This is what the app shows once my location is detected.
The app detects the location and aggregates blue collar jobs around that location. The application to the job can be done within seconds.
The app also has a chatbot that provides useful prompts and job seekers can ask questions and receive answers within 15 minutes.
3. Strong Defensibility - Network Effects and Switching Costs
The platform has strong network effects with job seekers and employers. The platform claims to have already enabled 15 million interviews per month.
The platform also has a very clever value add for users. It enables job seekers to seamlessly acquire ‘skill medals’. Basically, if a job seeker clears an interview for a job, he/she is assumed to have the necessary skills for the job and the skills required for the job are added in the profile as ‘skill medals’.
The accumulation of such credentials/medals creates switching costs for users who have acquired these medals and makes the platform further defensible.
The platform also enables connections between job seekers. And a glance through suggests many users are willing to make these connections which might help in future referrals as well as maybe advice on jobs. The users can also join ‘Groups’. While the utility of these groups right now looks underwhelming but there can be good use cases in the future. Many groups have millions of users.
4. Massive Adjacent Market Opportunities
The user segment is highly cash strapped, has fluctuating income, has high need for upward income mobility and needs important support infrastructure/conveniences like rental housing, smartphone, data, fuel etc. to do their current jobs well.
Skilling will be a massive need for this user segment for upward income mobility. Identifying the right skills to acquire and enabling the skill development at low cost can be a very big opportunity for Apna.
Once there is more understanding of the users and proprietary data built for the users, there seems to be an obvious fintech play available. Some potential products are:
Co-brand credit cards with rewards on fuel purchases
Low cost short-term lending to tide over income fluctuations
Aggregating demand and hence lowering prices on vehicles, quality smartphones etc. along with financing if needed
Enabling affordable Pay-as-you-go micro insurance
There can also be opportunities to aggregate rental housing catered to the ‘migrant blue collar worker’ segment.
Conclusion
On the valuation question, as a close benchmark, we can look at naukri.com, the jobs platform subsidiary owned by InfoEdge. Sum of the parts valuation assigns Naukri a valuation of 3.5bn USD.
I believe Apna is a high potential startup that can be a multi-billion dollar company in the future. Currently employers can post jobs for free but undoubtedly this can be easily monetized. And the adjacent market opportunities are massive.
This was my first post! Please subscribe for more such high potential startups. Will also from time to time publish ‘opportunity theses’ on big overlooked/underrated market opportunities.