Capillary Acquires Tenerity’s Digital Connect To Strengthen Foothold In US, Europe

Within weeks of raising $45 Mn in a Series D funding round, Bengaluru-based SaaS startup Capillary Technologies on Thursday (June 8) announced the acquisition of Tenerity’s product Digital Connect. The financials of the deal have been kept under wraps.

Through this acquisition, Capillary aims to strengthen its position in the US and European markets by acquiring the reward ecosystem that Digital Connect enables on its platform. The deal marks its third acquisition in the US.

Tenerity is a US-based rebranded loyalty and engagement company, and, with a strong foundation in artificial intelligence (AI) and analytics, its product Digital Connect allows companies to engage customers with offers to make their brand memorable and generate incremental revenue. Tenerity will continue to operate independently following Digital Connect’s acquisition. 

After the deal, Digital Connect will be rebranded as Rewards+ and will be added as the fourth product on the Capillary platform alongside Engage+, Loyalty+, and Insights+, said the SaaS startup in a statement.

With this, Capillary claimed it would be the only company with a full suite of end-to-end intelligent loyalty solutions, inclusive of a technology platform, consulting, loyalty programme design, analytics, a full rewards network, and marketing communications.

Digital Connect’s team is based in the US, UK, and India. In the US, the Digital Connect team will join forces with Capillary’s previously acquired companies Persuade (bought in 2021) and Brierley (acquired in April 2023).

Capillary onboarded US-based Brierley for an undisclosed amount to expand its customer loyalty platform while also enhancing product capabilities and its partnership networks. 

“As we build on the momentum brought in by getting named as a leader on the Forrester Wave and integrating Brierley’s unparalleled 30+ years of industry expertise, the addition of Digital Connect’s Rewards network solidifies Capillary as the unequivocal pinnacle of loyalty solutions,” said Sameer Garde, the CEO of Capillary. 

Founded in 2012, Capillary is an end-to-end customer loyalty platform, which offers a view of unified and cross-channel strategies, delivering an omnichannel personalised experience for its customers. It claims to be working with over 250 brands, including Tata, Shell, PUMA, Petron, Domino’s, and Marks & Spencer.

The startup currently has a presence in the US, India, the Middle East, and South East Asia.

“After 10 years of robust growth in Asia, Capillary’s global expansion has now entered a full-throttle phase. Digital Connect’s specialised focus on the BFSI/telecom industry will accelerate our entry into a new vertical, said Aneesh Reddy, the founder and MD of Capillary.  

Capillary was set to go public and had filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in December 2021 for its IPO. However, the startup deferred its IPO plans due to a downturn in the global market.

It raised its latest funding round from Avataar Ventures and its limited partners, Filter Capital, and Innoven Capital.

Capillary slipped into the red in FY22, reporting a standalone net loss of INR 22.2 Cr as against a profit of INR 16.7 Cr in FY21. Its operating revenue was up 42% year-on-year to INR 163.3 Cr in the fiscal year.