Moka Raises $100M to Revolutionize HR Tech in China

Moka Secures $100 Million in Series C Funding

Moka, a Chinese startup focused on streamlining human resources management through innovative software solutions, has announced the successful completion of a $100 million Series C funding round.

Founded six years ago, the company’s core objective is to automate every phase of talent management. This encompasses the entire employee lifecycle, from initial recruitment efforts to the ongoing retention of valued personnel.

Automated Talent Management Features

Moka’s software offers features like automated collection of candidate feedback following interviews, storing this data securely within a centralized database.

Furthermore, the system proactively notifies employers when employees update their resumes, potentially indicating an exploration of alternative career paths.

Investment Details

This latest funding round was spearheaded by Tiger Global, with significant participation from Blue Lake Capital, GL Ventures – Hillhouse Capital’s early-stage investment division – GSR Ventures, and GGV Capital.

The investment arrives just over a year after Moka secured $43 million in a Series B round. While the company has achieved “unicorn” status, the specific valuation remains undisclosed.

Rising Investor Interest in Enterprise Productivity

Moka’s fundraising success is indicative of growing investor confidence in startups dedicated to enhancing enterprise productivity. This trend is particularly noticeable as data-intensive, consumer-facing internet services, such as e-commerce and ride-hailing, encounter increasing regulatory scrutiny.

Client Base and Retention

Moka currently serves over 1,500 paying clients, including prominent organizations like Tencent, Xiaomi, McDonald’s, and Arm China.

The company boasts an impressive annual retention rate exceeding 110%. CEO Li Guoxing, a Stanford University graduate, has previously highlighted the popularity of Moka’s products among Chinese internet companies.

Challenges Faced by Chinese SaaS Companies

Historically, Chinese SaaS (Software as a Service) companies have faced challenges in attracting investment. This is because the industry hasn’t always demonstrated the rapid growth associated with consumer-focused products like games and social media platforms.

Even Blue Lake Capital initially expressed reservations regarding the potential of Applicant Tracking Systems (ATS).

The Role of Regulation in ATS Adoption

“ATS gained traction in the United States, in part, due to regulatory requirements. Laws protecting job seeker privacy necessitate a dedicated system for handling application information, preventing its dissemination through company email,” explains Ray Hu, founding partner of Blue Lake Capital.

“We initially believed that China wouldn’t implement similar stringent regulations soon, thus diminishing the demand for ATS,” Hu stated, recalling his initial assessment of Moka around 2015.

Growing Demand in the Chinese Market

However, Hu observed that Chinese companies exhibited a strong and increasing need to improve recruitment efficiency and effectively manage talent resources. This drove “Moka’s growth curve very steep,” leading Blue Lake Capital to participate in the company’s Series B round.

Willingness to Pay for HR Solutions

It became apparent that Chinese HR professionals were not only receptive to ATS but also willing to invest in it. Moka’s average customer currently pays between 100,000 and 200,000 yuan annually for the software.

This pricing is a fraction of what comparable American systems cost, but aligns with the pricing of other SaaS categories in China, such as purchase management, after-sales support, and legal services, according to Hu.

Updated with investor comments.