Dusseldorf The three founders of Zenjob had to learn hard how to deal with crises. When the corona pandemic began, the recruiter’s sales collapsed by 70 percent in just a few weeks, says Frederik Fahning, co-founder and managing director of the start-up. Waiters and kitchen staff, who previously made up a large part of the start-up’s brokerage business, were no longer in demand during the lockdown.
Within a few months, the Zenjob founders adapted the business. Instead, they placed their mostly student short-time workers in corona test centers and logistics centers of online retailers. In the meantime, the start-up’s business has returned to normal – and is now growing rapidly.
From 13.8 million euros in the Corona year 2020, sales rose again in 2022 to 80 million euros. In 2023, Zenjob should generate more than 100 million euros, the founders told the Handelsblatt.
Eight years after it was founded, the start-up wants to make a profit for the first time in 2023. As early as 2022, the loss was reduced by 30 percent compared to the previous year. Zenjob officially reported a loss of 15.3 million euros for 2021.
In order to become profitable, the founding team around Fritz Trott has reviewed the business in recent months. The high hopes for foreign business in Great Britain and the Netherlands were not fulfilled, and the corresponding subsidiaries were wound up at the end of 2022.
Employees were also laid off in the process – that was hard but necessary, says co-founder Fahnung. The layoffs were “the result of a very honest analysis of the entire company” and the “procedural gains that the technology is already providing.” Around 300 employees currently work for Zenjob, a third of them in technical product development.
The founders of Zenjob now want to concentrate on business in Germany, they see enough growth potential here – despite the currently difficult environment. “In Germany alone, the market for permanent placement is gigantic with a turnover of 30 billion euros,” says Zenjob boss Trott. Up until now, traditional recruiters have dominated the market. “Great companies, but stop at dinosaurs,” says the Zenjob boss confidently. However, compared to industry giants such as Adecco or Randstad, Zenjob is still a dwarf.
More than minimum wage
In order to continue growing, the start-up wants to be faster and more flexible than the traditional competition. Employees can now be placed within a few hours, ideally even within 20 minutes. Shift supervisors could draw up their duty roster in the morning and use the system to find the right employees for the same day.
The start-up places 90 percent of the jobs automatically. The companies make an inquiry, the system searches for the right employees, and even the application and payment processing runs through the Zenjob system. 50 percent of wages are paid within 72 hours, the rest at the end of the month.
Zenjob operates in a sensitive environment: Recruitment in the low-wage sector has a bad reputation. Low wages, fixed-term contracts and high pressure are often part of everyday working life. Zenjob wants to be an exception here.
At the beginning of the corona pandemic, restaurants and bars had to close, and the demand for waiters and kitchen staff collapsed. Zenjob quickly switched to placing employees in corona test and dispatch centers.
(Photo: dpa)
In a study by the non-governmental organization Fairworks, the start-up has always received the best rating of the platform economy companies examined in recent years, with nine out of ten possible points. While delivery services such as Gorillas or travel agents such as Uber are criticized in the study for the sometimes precarious and insecure working conditions, study co-author Maren Borkert expressly praises Zenjob: “In our sample of platforms, Zenjob is the only one that offers contracts in a market that is normally run by freelancers employment relationships,” says the professor for digital entrepreneurship at the XU Exponential University in Potsdam. In addition, the platform has set out explicit anti-discrimination and diversity clauses.
“Zenjob thus also stands out from international start-ups and shows that a regulated market for temporary work can also produce better working conditions for employees,” says Borkert.
The start-up not only pays attention to the reliability of the employees, the employees can also use the Zenjob system to rate the companies. If the short-time workers come across an unfriendly boss or if the safety regulations are not strictly observed, they can give feedback here, which the companies receive anonymously and can thus improve working conditions. Companies that repeatedly attract negative attention can no longer call on workers via Zenjob.
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Zenjob founder Trott also wants to stand out from the competition when it comes to payment. The mediated employees earned an average of between 13 and 14 euros and thus more than the minimum wage.
“Many customers don’t know themselves how to proceed”
Trott and Fahning don’t come from recruitment agencies themselves, but from the start-up scene. As students, they experienced how opaque and frustrating the search for a short-term job can be. Their system arose “from the platform idea,” says Trott. “It’s a data game.” The aim from the outset was to bring supply and demand for short-term jobs together more quickly through automation. The third co-founder besides Trott and Fahning, Cihan Aksakal, developed the technical basis for the Zenjob system.
Trott himself learned a lot about building companies at Rocket Internet – in the start-up universe of the Samwer brothers. The largest German start-up incubator has long been known for leading new companies to a relevant size in the shortest possible time and then selling them or listing them on the stock exchange.
But even if the start-up continues to grow rapidly, the environment has become more difficult. “Many customers don’t know themselves how to proceed,” says Fahning. As the economy weakens, interest rates rise. This makes refinancing difficult for start-ups like Zenjob. Because investors are no longer satisfied with rapid growth for a high valuation – they want to see profits.
Zenjob also wants to place more qualified workers
Zenjob’s investors currently include Acton Capital Partners from Munich, Axa Venture Partners from France and Aragon Global from the USA. The start-up completed the last round of financing in January 2022.
Instead of expanding into other markets, Zenjob wants to expand its own technology in the coming months. The company is investing 30 million euros in order to no longer just provide short-term student jobs and unskilled jobs, but also more qualified jobs. In addition to on-site training, the company also wants to offer more digital training courses.
Because the demand for flexible part-time jobs is constantly increasing in Germany – also due to the currently high inflation. The Zenjob founders have learned that a crisis can also be an opportunity for start-ups.
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