After Deferring IPO Plan, Capillary Bags $45 Mn Funding From Avataar Ventures And Its LPs

After postponing its IPO plan, Bengaluru-based SaaS startup Capillary Technologies has raised $45 Mn in a Series D funding round from Avataar Ventures and its limited partners (Pantheon, 57Stars, and Unigestion), Filter Capital, and Innoven Capital.

In a statement, the startup said it will utilise the fresh funding to expand its global operations and for merger and acquisitions. 

Speaking on the fundraise, Capillary Technologies founder and MD Aneesh Reddy said, “…With this new funding, we are poised to expand our footprint in North America, and Europe and pursue strategic acquisitions that align with our vision of becoming the preeminent loyalty company globally.”

The funding announcement comes almost a month after the SaaS startup acquired Texas-headquartered Brierley+Partners for an undisclosed amount. Brierley was the fifth acquisition of Capillary Technologies. 

Earlier, the startup acquired Persuade, SellerworX, MartJack and ML platform Ruaha Labs. Besides, it also holds minority stakes in Exclusife and WebEngage.

With the latest funding, the startup has raised over $140 Mn across multiple rounds. It counts marquee investors like Sequoia Capital, Warburg Pincus, and Avatar Capital among its backers. 

Founded in 2012, Capillary Technologies is an end-to-end customer loyalty platform that offers a view of consumers, and unified, cross-channel strategies that deliver a real-time omnichannel, personalised, and consistent experience for customers. 

The SaaS startup powers over 100 loyalty programs across 30 countries. It works with popular brands like Puma, Tata, Domino’s, and Mark & Spencer. 

Capillary Technologies was among a large number of Indian startups which intended to go public amid the funding and equity markets boom of 2021. It filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in December 2021 for its initial public offering (IPO). 

As per the DRHP, the public offering was to consist of a fresh issue of shares worth INR 200 Cr and an offer for sale worth INR 650 Cr.

However, as market conditions deteriorated, Capillary Technologies, like many other Indian startups including boAt, PharmEasy, Mamaearth, and ixigo, postponed its IPO. “The market isn’t great for an IPO. We are well capitalised and will wait for the market to improve,” Reddy told Inc42. 

The SaaS startup is said to have deferred its plan to go public by 18 to 36 months. 

Capillary Technologies slipped into the red in FY22, posting a standalone net loss of INR 22 Cr as against a net profit of INR 16.7 Cr in FY21. Its operating revenue jumped 1.4X year-on-year to INR 163.3 Cr, while expenses surged 1.6X to INR 170.3 Cr in FY22.

The fundraise comes at a time when Indian startups are reeling under the effects of the ongoing funding winter. However, in what comes as a ray of hope for the Indian startup ecosystem, the funding raised by startups rose 15% month-on-month to $1 Bn in May 2023.