- Earlier most new age companies didn't hire a CFO unless they reached a certain scale, i.e US$30-50 million dollar in annual recurring revenue (ARR).
- Now, in the race to be profitable, even companies with as much as US$10 million in ARR are looking to hire a CFO
- CFOs' role is no longer limited to wielding red pens in spreadsheets; rather they spend much of their time working with all stakeholders
- But over reliance on financial metrics underestimates the real returns of prospective investment and curtails innovation.
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Devil’s advocate, Dr. No, strategic partner, value extractor, and trusted advisor.
These are the qualities startups like Physics Wallah, Third Wave Coffee, Upgrad, and Scaler want in a crucial hire they are looking to make for the first time.
The chief financial officer (CFO).
Startups looking to unlock profitability and get IPO-ready are queuing up at the door of finance professionals.
More than 40% of all CFO searches done by Korn Ferry in recent times were for startups and new-age companies that are planning to get listed, said Rahul Kakkar, partner and India lead CFO practice at Korn Ferry. Another recruitment firm said there are currently over 180 active openings for CFOs and head of finance positions across startups.
Given the increase in hiring mandates for CFOs, Korn Ferry, in 2022, hired a partner who exclusively focusses on scouting for CFO talent across industry sectors. The firm has seen a 40% increase in the number of CFO searches over the last 18 months.
With the CFO, the finance team sizes, too, have been growing.
“If the years 2021 and 2022 were dedicated to hiring tech talent, then the coming two years are dedicated to finance talent,” said Abhishek Mishra, chief strategy officer at Physics Wallah. In the last few months, the edtech firm, which has over 12,000 employees, hired over 45 finance professionals across business finance, internal audit, and controllership.
Food-tech aggregator Swiggy has close to 10 openings in its finance team, including senior executives for taxation and enterprise risk management. In July 2023, the company hired a head of investor relations and, six months later, a senior manager for business finance. IPO-bound Phonepe and Oyo, too, have such openings in their finance teams.
These finance professionals, who were once considered risk-averse with dreary jobs, suddenly find themselves sitting on plum offers from startups.
The finance boom
If 2021 was marked by eye-wateringly high salaries for engineers and tech workers, now it’s the time for finance professionals.
Fintechs, software-as-a-service (SaaS), and direct-to-consumer (D2C) firms are offering seasoned finance professionals an annual compensation in the Rs 2.5–4.5 crore (US$300,900–541,600) range, according to executive recruitment firms.
Credits
Written by Vanita Bhatnagar
Edited by Raveena Singh
Lede illustration by Adhithi Priya Rajagopal
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