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Among the casualties of the mass displacement of technology are the people who helped hire their colleagues in the first place. Paraform, a startup that wants to change how the recruitment industry works by adopting a marketplace approach, is giving professional recruiters a new way to find work on a freelance basis.
Today, Paraform raised seed funding led by Premier Sazze Partners from Twitch co-founders, including Kevin Lin, and Scale AI and Founders, Inc.
Paraform works by enabling tech companies to post bonuses for open roles. Anyone can find him if he mentions a successful candidate. They don’t have to be professional recruiters, but they are 90% of Paraform’s user base (and in the future they plan to expand to all professionals, including software engineers, designers, and account executives).
Paraform’s founders, John Kim and Jeffrey Lee, say this gives employers access to wider talent networks and also allows employers to work without starting their own recruitment agency. So far, the platform has been used by startups like token-based crypto company management solution Magna, AI-generated art and search engine Lexica, and cloud-enabled DevOps platform Zeet to find employees.
Prior to founding Paraform, CEO Kim Ruler started and sold a recruiting startup called Network. It was acquired by edtech Crimson Education, where Kim worked as director of related product for careers and recruitment. CTO Li, meanwhile, was a software engineer at Cruz before quitting after launching a successful NFT project and decided to look into the concept of a decentralized private network.
Paraform founders Jeffrey Lee and John Kim. Image Credits: Paraform
The two were interested in web3, but didn’t see strong blockchain applications in the recruiting space, so instead they worked on Twitter’s candidate search tool (which Kim describes as “LinkedIn for web3”). People can find Twitter users by entering their email, GitHub, LinkedIn and other public profiles. It enables and startups use it to find founding engineers.
Kim told TechCrunch that the experience taught him and Lee that “anyone can be hired, so having professional networks or the ability to make professional connections is very, very important for companies that have talent.” As a result, they began to build Paraform.
At first, they found professionals connecting friends and colleagues for bonuses, but they quickly realized that professional recruiters were the best early adopters.
In addition to providing employers with a source of freelance work, Paraform is also interested in solving the hiring challenges of technology companies. For example, early-stage tech startups (Paraform’s target customers are the seed for Series B companies) often rely on outsourcing rather than internal recruiting, because they lack the brand recognition of larger companies. But recruiting abroad is time-consuming, which the founders lack, with money to hire a recruitment agency.
As a result, many rely on referrals from personal networks, but “they only work well if your company reaches a certain size,” says Kim. Paraform’s marketplace format allows you to hire more efficiently with less time and money. It can also be fast. Kim says Paraform’s average hiring time is one month, compared to the industry average of two to three months.
Asked how the ongoing technology shift will affect Paraform’s direction, Kim said, “This is an unprecedented time where there are so many people who are good at what they do, who want to do something,” including recruiters, engineers and product managers.
“I wouldn’t say the technology cuts were the reason we started Paraform,” Kim said, adding that it started before the layoffs. But recruitment gave us a great opportunity and a real market to disrupt. This new world we envision is more plausible with the fact that there are many recruiters looking for alternative ways to make money, rather than being limited to one company.
Many tech companies hire a lot of recruiters at first, but then stop when growth stops. I have come across hundreds of recruiters who go into contract every six months. Kim believes the best solution is to engage recruiters only when they need them and pay them more for each hire.
Of course, freelancing has some disadvantages, such as full-time benefits. But Kim Paraform has several selling points for professional recruiters. For example, recruiters earn $2,000 to $3,000 if they work full-time at a company or agency. By comparison, the average income at Paraform is $10,000 to $15,000. The platform pays recruiters every time they pass the first round of interviews, so placing a candidate isn’t their only chance to make money.
Flexibility is another bonus, Kim added. “We believe recruiters are most effective when they work with multiple companies. It’s very common for full-time in-house recruiters to turn down candidates if the company they’re working for doesn’t have an opening. That’s not the case with Paraform.
Startups in the same space include passive candidate recruitment platform Palette and recruitment sourcing startup Dover. Paraform is up against traditional players like recruitment agencies, staffing firms and talent solutions.
Kim Paraform is different because of its marketplace format, built by a network of employees who are constantly expanding their networks. We are able to easily post their vacancies and turn anyone into their employer and recruiters who can effectively access a large network of candidates as a gig workforce.
In a statement about the funding, Twitch founder Kevin Lynn said, “When you look at the massive impact of these tech cuts, the entire human industry is at a loss. John and Jeff stumbled upon a need and created a solution to provide jobs and revitalize a traditional industry. We believe in the power of Paraform’s marketplace and the network it creates, and are proud to support the company and its positive impact on recruiters and companies.
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