Indian SaaS startup Capillary Technologies grabs $45M to expand globally

Capillary Technologies, an Indian SaaS startup that provides options for loyalty administration and buyer engagement, has raised $45 million in a funding spherical, because it plans to expand into world markets and widen its attain by means of mergers and acquisitions. The funding arrives at an important time amidst the prevailing market slowdown, the place startups, notably these on the late stage, are going through a capital crunch.

Capillary’s Series D funding spherical was led by Avataar Ventures and its LPs Pantheon, 57Stars and Unigestion. It additionally noticed participation from Filter Capital and Innoven Capital. The spherical includes $40 million in fairness and about $5–$7 million in debt. With the newest capital injection, the startup has raised almost $150 million in capital to date.

Founded in 2012, Capillary Technologies initially centered on the retail vertical in India and Southeast Asia. In latest years, it has broadened its choices and launched in additional markets together with the Middle East and South Africa, and since early 2021, the U.S.

Capillary is carving a particular area of interest out there with its emphasis on gamification to bolster buyer loyalty, a method it says it has been ready to deploy throughout commerce, retail, aviation and hospitality sectors.

The Bengaluru-based startup’s suite of technology-driven, cloud-native options has helped it entice quite a few shoppers. Already, it has collaborated with over 250 manufacturers throughout 30 international locations, powering greater than 100 loyalty applications. High-profile shoppers embody Domino’s, Tata Group, Puma, Shell, Petron and Marks & Spencers. Capillary’s tech reaches over a billion clients and clocks over 5 billion transactions yearly.

“The way most of our competitors in the U.S. and elsewhere have built in as like a services business where customers ask you something, and you build it. On the other hand, we have taken a very product view to it,” Capillary Technologies founder and managing director Aneesh Reddy mentioned in an interview.

Just over a few years after getting into the U.S. and buying the shopper expertise startup Persuade, Capillary’s enterprise has grown by 3.5x, the startup mentioned, with out disclosing particular numbers. It additionally says the U.S. now accounts for greater than a 3rd of its revenues.

The startup has made 5 acquisitions within the U.S., with the final one in every of Texas-based loyalty options supplier Brierley from Nomura introduced in April this 12 months. These acquisitions have helped it to introduce options to shoppers working in wider verticals.

Reddy informed TechCrunch that Capillary is searching for to leverage the contemporary funding to expand its presence within the U.S. and Europe by means of actively pursuing strategic acquisitions, as a part of its progress technique.

“The core business is profitable and growing by itself, so most of the funding is going to be used for acquisitions,” he mentioned. “As you would guess, if you have the money, this is a great time to buy.”

In late 2021, Capillary Technologies filed its draft papers to go public in India. The startup has, although, delayed that plan due to the continuing market slowdown. Reddy mentioned the concept of submitting an IPO in India continues to be being thought of and he could government that inside the subsequent three years.

“The good piece of Capillary is it’s profitable. With this fundraise, we have a lot of excess cash also on the balance sheet. So, it’s not like I have a gun to my head to list,” he mentioned.

Capillary has a headcount of over 750 folks, together with 200 contractors, and has places of work in Dubai, Indonesia, Malaysia, and Singapore, other than India and the U.S. It counts Sequoia Capital and Warburg Pincus amongst its present backers.

“It has been truly remarkable witnessing Capillary’s business transformation over the past four years,” mentioned Mohan Kumar, Managing Partner at Avataar Ventures, in a press release.

“The strategic decision to diversify from Asia into the US and Europe, encompassing various consumer verticals beyond retail, has been nothing short of impressive. This move has catapulted Capillary into a leadership position in Loyalty software and this has been recognized by external mentions like the Forrester Wave. Given the expanded addressable market and the immense potential that lies ahead, Avataar is wholeheartedly committed to supporting Capillary in its pursuit to become a global market leader.”