Paraform raises $3.6M seed round to connect startups with recruiter networks

Layoffs usually drive attention and sympathy toward affected employees, but rarely does anyone talk about what happens to the recruiters who are sometimes also asked to leave when companies decide to cut headcount. Indeed, tech firms cut up to half of their recruitment teams when they were laying people off in droves back in 2022 and 2023.

Paraform, a recruitment platform aimed at startups, feels there’s an opportunity in tapping the pool of laid-off recruiters who have since branched out to start their own business, and helping startups source talent and access a broader talent network. To fund that effort, the company recently raised a $3.6 million seed round led by A*, a venture capital firm founded by Kevin Hartz — the co-founder of Eventbrite and Xoom, and Airbnb’s first investor.

“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,” John Kim, CEO of Paraform, said 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.”

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

The startup charges a listing fee (subscription fee) to publish jobs on the platform and a success fee when a hire is made. “The listing fee ensures buy-in from startups to the two-way marketplace and a commitment to the recruiters they’re working with,” Kim said.

In addition to early- and late-stage startups, Kim said the platform also works with larger in-house talent teams to fill challenging roles. “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 company CEO explained.

The new funding, which brings Paraform’s total capital raised to $5 million, comes a year after Paraform’s pre-seed raise in March 2023. Kim said that since the pre-seed round, Paraform’s revenue has increased 10x, it has onboarded more than 100 new customers and has it grown its team. The company generated more than $1 million in revenue with a three-person team in its first year of operations, he added.

Other investors in the seed round include DoorDash co-founder Evan Moore and leaders at companies like Affirm, Hightouch, Palantir and Ramp. Previous backer Primer Sazze Partners also participated.

Paraform will use the new capital to expand across the U.S. and hire more engineers and operators to service its growing customer demands. It also intends to enter new countries and markets. It is now a team of four and hopes 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.”

The startup has rolled out an enterprise product, and is planning to expand its 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 said.

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

Kim said AI will enable recruiters to understand what hiring managers are seeking. AI technology will allow them to summarize and provide “the most common reasons why they’ve passed on a candidate, ultimately helping recruiters gain a better understanding of how to identify the best candidates.”