Hunt For CFOs Heats Up As Firms Look At Expansion, Fund Raising - Funding & IPO Support

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Hunt For CFOs Heats Up As Firms Look At
Expansion, Fund Raising - Funding IPO Support
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For six months now, a Bangalore-based mid-sized
hotel chain has been looking for a CFO. The
slowdown over the past few years has seen the
companys financials come under pressure room
tariffs have fallen, sales are down, and, like
any other borrower, it has a fraught relationship
with banks, although it sees growth returning
now. Our earlier CFOs job was not very complex,
but now we need a CFO who is both a fire-fighter
and strategist to help the hotel emerge from the
slump and grow as we plan to acquire new
properties, said the HR head of this hotel who
requested anonymity and did not want her firm to
be named.
http//mycfo.in
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The hotel chain is among several mid-sized and
start-up firms that have given mandates to search
firms such as ABC Consultants, RGF Executive
Search, Lighthouse Partners, Manpower Group,
Antal International to hire CFOs. The number of
such mandates has increased by at least a third
in recent months, say executives at the search
firms. Demand for CFOs from sub-Rs.1000 crore
(in sales) companies has doubled for us compared
with two years ago, says Shiv Agrawal, managing
director, ABC Consultants, adding that the
company has received six-eight mandates in the
past three months alone.
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Some of the demand is coming from start-ups that
are growing rapidly and are looking for fresh
investments and funding. Online lingerie retailer
Zivame.com, Pokkt.com, a platform that helps app
developers monetise their offerings, and Rez Next
Global Solutions Pvt. Ltd, which connects
customers with hotels, are among the firms that
have given out mandates to hire CFOs. We are
business and tech guys who are focused on running
the business, says Rohit Sharma, founder of
Pokkt, which raised 2.5 million in July.
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Looking to close another round of funding in two
months, Sharma believes the time has come to hire
a CFO. E-commerce firms and start-ups have
typically had trouble hiring CFOs, as most
established finance heads dont want to jump into
the relatively high risk start-up world. After
having its CFO post vacant for nearly 18 months,
e-commerce giant Flipkart India Pvt. Ltd is
likely to hire former Tata Communications finance
chief Sanjay Baweja for the job. We received a
lot of applicants, but we are looking for the
right person, as we cannot afford to make
mistakes, said Richa Kar, founder of Zivame,
which has raised 6 million in Series B funding
last year and has been looking to a hire a CFO
for six months now.
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Investors, too, are pushing start-ups to find
professional CFOs. While most companies we meet
are run by strong entrepreneurs, they usually
have not paid a lot of attention to the finance
function. Therefore, after we invest in the
company, one of the first searches we embark on
usually is for a CFO. More than 50 of the
companies we invest in, we help improve their
finance function by first helping hire a CFO,
said Abhay Pandey, managing director of Sequoia
Capital India. Tougher compliance and governance
norms put in place by the new Companies Act that
was passed last year are another reason for the
sudden demand for CFOs. Among other changes, the
Act now makes it mandatory for a CFO to sign off
on a firms profit and loss account earlier, the
Company Secretary could do so.
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We were not keen to fill this position earlier,
as we were managing with our finance team, but
with tighter corporate governance norms in
addition to our pan-India expansion plans, we
felt the need to fill that position, said R.P.
Trivedi, HR head, of the five-decade old VRS
Foods Ltd, a Delhi-based dairy company, which is
looking for a CFO.
http//mycfo.in
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Still, there is a limited pool of highly-skilled
CFOs. Of the 65,000 firms above Rs.100 crore,
only 10 have a CFO, says Deepak Narayanan,
co-founder, MyCFO, which provides chief financial
officers for temporary assignments. The shortage
of trained professionals and the increased demand
and responsibility has also meant that the salary
of a CFO has gone up by about 20, says Agrawal
of ABC Consultants. As Narayanan says, It is a
good time for skilled finance professionals, as
there is a real war for talent amongst companies.
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