Zenjob cofounder and chief executive Fritz Trott doesn’t have the hypergrowth-first mindset of many founders.
He is not planning a hiring spree, rapid international expansion or to completely reinvent a category.
But his company, an automated staffing platform that matches students with flexible or temp jobs, recently closed a Series C round of $30m right in the midst of a wider slowdown in funding due to coronavirus.
Trott says that it was quite simple: the best VCs saw that he was trying to build a long-term sustainable business, and were willing to back it.
“If I’m active in the biggest and most promising European market, and taking in revenue, I really need a good reason to go to another country right away,” Trott told Sifted about his company’s slow and steady growth strategy.
“A lot of VCs dropped interest in the round because we are not international. Actually we’re only in 14 cities in Germany.”
Although Zenjob — led by Trott and his cofounders Cihan Aksakal and Frederik Fahning — does plan to go international, its sights are currently set on the €37bn temporary staffing market in Germany. It’s a market that’s both broken and still very offline, Trott said.
For Trott and his team, Germany is the ideal place to work on fully digitising temporary staffing from end to end. That’s been their core mission from day one.
The Zenjob founding team’s original vision has helped guide the company toward putting tech and product before hypergrowth. Back in 2015, they wondered how they could apply the same artificial intelligence tech found in Netflix and Tinder to “on-demand” jobs and staffing.
“You spend most of your lifetime actually working, but you have so little control and transparency. How cool would it be if you could just pick your job, stop your job, change your job in the way you pick and change a movie on Netflix?” Trott said.
And so Zenjob was born with the goal of creating a flexible future for jobs. The platform pushes a range of jobs (at companies including Uniqlo, H&M, Flixbus and Mercure Hotels) directly to students.
That tech-first mindset — in what is otherwise a traditionally offline industry — is what makes Trott and his cofounders so confident in their strategy.
“We were quite lucky, because Cihan, my cofounder, has a technical background, and my other cofounder Frederik has the legal background. Although there are a lot of other great players in the market, none of them are as digital and as deep into the regulations as we are.”
Even though Covid-19 completely crushed industries such as food and retail — two areas of focus for Zenjob — it also created demand in staffing for supermarkets, drugstores or logistics. Trott said that the increased demand created a make-or-break opportunity for the company.
Either they would seize the opportunity to further improve their product and expand to new cities in Germany, or they’d waste a good chance.
Luckily for them, their focus on end-to-end digitalisation helped them simply continue while others in the industry got hit. “Because we are autonomous and digital, fully delivering the service down the whole value chain in contemporary staffing markets, we were able to continue,” Trott said.
He also revealed that Zenjob’s logistics and food retail business increased by more than 100%. The success of the fully digital product was one reason why Zenjob was able to prosper during coronatimes and keep their investor, Forestay, onboard.
Covid-19 and the demand for staff at short notice have made the Zenjob team more eager to quickly expand within Germany, but Trott maintains that his primary focus is creating the best product.
“If I compare digitising temporary staffing with the beauty business or the food delivery business, you can’t just easily translate the website, localise the app to the language of the new market and be done with it,” he said.
“In our case, you have to learn completely new regulations, a new tax system, a new employment and legal setup that you need to translate into technology.“
Trott said that Forestay was the VC who believed in the vision of slow growth and came through during a tough few months of the crisis. They walked the walk, unlike others he had spoken with.
“A lot of VCs who said, ‘hey, we invest in teams sustainably and long term’ — they disappeared. They didn’t even answer my emails, they didn’t even follow up on meetings. That was a very good test.”
He said many VCs even came back two weeks later, once the initial spike in corona anxiety calmed down.
“They said ‘sorry, we were tied up before, but we’re still interested’. I fully understand and I’m not blaming them, but it was a good thing to learn. On the other hand, Forestay, they were just there. They followed up, they meant it and it showed; they were in it for the long haul.”