Indian SaaS Startup Capillary Tech Raises $45 Mn to Expand Globally

At a time when the late-stage startups are struggling to raise funds, Bengaluru-based SaaS startup Capillary Technologies has successfully raised USD 45 million in a funding round. 

The startup aims fuelling its expansion into global markets and strengthen its position through mergers and acquisitions. The funding comes at a crucial time because of the prevailing market slowdown.

Series D Funding Led by Avataar Ventures and Supported by Prominent Investors

Capillary's Series D funding round was led by Avataar Ventures, with participation from LPs Pantheon, 57Stars, and Unigestion. Additional investors include Filter Capital and Innoven Capital. The round consisted of USD 40 million in equity funding and approximately USD 5–USD 7 million in debt financing. With this recent capital injection, the startup has raised a total of nearly USD 150 million in funding to date.

We're proud to announce a series D round of $45 million from a consortium of global investors- Avataar Venture Partners along with its LPs (Pantheon Ventures, 57 Stars, and Unigestion), Filter Capital India Advisors LLP, and Innoven Capital.https://t.co/J6IOWOOuVx

— Capillary Tech (@capillarytech) June 1, 2023

Emphasis on Gamification and Diverse Industry Application

Capillary Technologies emphasises on gamification as a means to strengthen customer loyalty. The startup has successfully deployed this strategy across various sectors, including commerce, retail, aviation, and hospitality. Its innovative approach has garnered significant attention, leading to partnerships with over 250 brands across 30 countries. Capillary powers more than 100 loyalty programs and serves high-profile clients such as Domino's, Tata Group, Puma, Shell, Petron, and Marks & Spencer. The company's technology reaches over a billion customers, facilitating over 5 billion transactions annually.

Established in 2012, Capillary Technologies initially focused on the retail sector in India and Southeast Asia. Over the years, the company has expanded its offerings and entered new markets, including the Middle East, South Africa, and the United States since early 2021. With its suite of technology-driven, cloud-native solutions, Capillary has attracted numerous clients seeking to enhance customer loyalty and engagement.

Capillary Has Product-Centric Approach 

Capillary Technologies distinguishes itself from its competitors by adopting a product-centric view rather than a traditional services-based approach. According to Aneesh Reddy, the founder and managing director of Capillary Technologies, many competitors build solutions based on customer requests, whereas Capillary focuses on developing robust products that address specific market needs. This approach has contributed to the startup's success and strong growth trajectory.

Capillary Technologies Experienced 3.5-Fold Growth

Within just a few years of entering the U.S. market and acquiring customer experience startup Persuade, Capillary Technologies has experienced a remarkable 3.5-fold growth, although specific figures were not disclosed. The United States now accounts for over one-third of Capillary's revenues, indicating the startup's significant traction in this key market.

Future Outlook: Global Expansion and Mergers & Acquisitions

With the fresh funding secured in this Series D round, Capillary Technologies is well-positioned to drive its global expansion plans further. The company aims to enter new markets, strengthen its presence in existing ones, and explore potential mergers and acquisitions that align with its growth strategy. As Capillary continues to innovate and provide unique solutions for loyalty management and customer engagement, it is poised to make a significant impact in the global market.