When AI meets the most human of all business functions
We are thrilled to lead a $5M Series A investment in Klaar. From their days as XLRI batch mates to solving HR pain points they personally experienced, Sharthok Chakraborty and Atri Roy have built a remarkable AI-first performance and talent management platform. By automating the mundane tasks while amplifying the meaningful interactions - Klaar empowers managers to focus on human-centric aspects of the process such as coaching, mentoring rather than paperwork.
While much of today's AI excitement centers on breakthrough capabilities—doing things never before possible—there's a quieter but equally transformative opportunity: reimagining the broken processes we've all learned to tolerate. These are the workflows that have devolved into bureaucratic exercises everyone dreads but has made peace with. The way organisations design performance and talent management processes today is one such example.
Performance management is the ultimate paradox in modern business. It's simultaneously the most critical driver of organizational success and the most universally despised business process. Here's the brutal reality: as per Deloitte, only 2% of Fortune 500 CHROs believe their current performance management systems actually inspire employees to improve. Even more alarming, global employee engagement has plummeted to just 21% in 2024—the lowest level since COVID—costing the global economy $400B+ in lost productivity. Meanwhile, managers burn hundreds of hours yearly on performance processes they hate. Furthermore, Gartner estimates that 95% of HR leaders remain dissatisfied with their company's performance and appraisal systems.
HRIS platforms were built for record-keeping, not people development. They require massive HR teams just to operate, deliver zero automation, and force rigid workflows that don't match how organisations actually work. While marginally better, performance management focused point solutions digitized the problem without solving it - they still require heavy HR involvement, achieve dismal organic adoption (<40%), and turn performance reviews into retrospective documentation exercises rather than forward-looking development conversations.
Managers spend hours on manual review writing, employees receive generic feedback that doesn't drive growth, and HR teams exhaust themselves trying to hit even 60% participation rates. The cost of this broken system compounds: poor performance management directly drives low engagement and eventually attrition.
When we met the Klaar team, we discovered they had approached this problem from people-first principles. As HR practitioners themselves, Sharthok and Atri understood that the solution wasn't more features or better dashboards - it was fundamentally rethinking how technology could make performance management and HR actually work. The product has two breakthrough components:
- AI engine that understands context: Proprietary models that draft 80-90% of performance reviews by synthesizing data from Slack conversations, Jira tickets, and regular check-ins - transforming months of interactions into meaningful, personalized feedback and not generic templates
- Workflow platform built for reality: Configurable system that handles matrix organizations, multi-manager inputs, and custom review cycles without requiring consultants or IT support - going live in weeks as opposed to months while enabling organisations to operate in their process rather than enforcing one
What sets Klaar apart is their practitioner-led approach to product development. Rather than building what they think HR needs, they've co-created the platform with companies like Urban Company, Vidyard, and Deutsch Telekom Digital Labs.. The results speak for themselves: 90%+ first-cycle completion rates (vs industry standard of 40-60%), 50-60% upward feedback participation, and managers getting 15-20 hours back each month. One CHRO told us: "For the first time in my career, managers are actually asking for a performance review season to start." We didn’t think that any HR tech product could receive such admiration from HR function stakeholders as well as the end users.
The timing couldn’t be better as 75% of organisations that Gartner interviewed plan to integrate AI into the performance review process. Klaar already serves enterprise customers globally and is seeing high velocity revenue growth with exceptional unit economics. The company has assembled a world-class GTM team including Lana Peters as Chief Revenue and Customer Experience Officer. She previously scaled HR tech companies such as HiBob to multi million dollars ARR scale. With this fundraise, Klaar plans to accelerate US market expansion and continue pushing the boundaries of what AI can do for talent management in organisations.
Klaar aligns with the evolving role of people function, enabling CHROs to become strategic partners by connecting performance and talent management directly to business goals and talent retention. We believe that Klaar is building the future of performance management - where AI handles the administrative burden so humans can focus on what matters: growth, development, and meaningful conversations. In a world where every function has an AI mandate, we can't think of a better team to lead this transformation for the most important function in any organisation - its people!
