Customer relationship management (CRM) and automation startup Hashtag Loyalty has raised an undisclosed amount in a Seed funding round from New York-and Delhi-based seed stage-focused investor Ahimsa Capital. The startup had previously raised funding in a pre-seed round in August 2016 from another seed-stage investor thinQbate.
Mumbai-headquartered Hashtag Loyalty was launched in May 2015 by Dhruv Dewan, Karan Chechani, and Krishi Fagwani. The startup initially offered hardware-based solutions. It offered businesses a kiosk tablet and a card to enable a loyalty service programme, mostly to help restaurants entertain and engage customers. Their hardware-based offering had about 70 restaurants in Mumbai with 45K users.
“We didn’t see it scaling as hardware was involved and was getting expensive in terms of manufacturing,” Dhruv said.
After a year, the early-stage company pivoted to providing mobile number-based CRM solutions that enable offline businesses to engage with their customers by managing contacts, sales workflow processes, and productivity.
With the latest round of investment, the startup plans to increase its businesses value proposition and expand its presence.
“This round of funding is a culmination of our single-minded focus on presenting true value to offline businesses. We are really excited about the support we’ve received from the Ahimsa team. Their combined expertise building top-notch brands will help us take the next leap in our journey,” said Karan.
Inc42 caught up with the founders of Hashtag Loyalty to get deeper insights into their offering.
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Helping Businesses Capture Consumer And Transaction Data
Dewan explained that the core technology did not change when the startup shifted from its hardware offering to CRM. It launched its CRM platform in November 2016 to help businesses — mostly in the retail sector — capture customer data, usage patterns and buying behaviour and study them to serve their customers better. Dewan added that they converted about 80% of their hardware clients to CRM.
“We help offline businesses capture consumer and transaction data via loyalty as well as feedback. Once the data is entered into our platform, we provide businesses a tool that enables them to interact with the customer and helps them connect more with the product/service,” he said.
Dewan explained this with an example: “Let’s say, one visits a Belgian Waffle outlet and buys waffles and doesn’t come back for about a month. Since the transaction took place through our system, we will be able to automate all marketing communications of the business based on who the customer is, what they buy, how much money they spend, what they do etc. Thus, the company can send the customer an offer around a product they had consumed or can push more customised notifications to lure the customer back to the store.”
With its back-end based on Ruby or Rails framework, Hashtag Loyalty also uses a lot of machine learning to automate communication with customers.
Hashtag Loyalty: The Marketing and Monetisation Strategy
Hashtag Loyalty is a business-business-customer (B2B2C)-focused startup. It has its team members working in Gujarat, Hyderabad, NCR, and Bengaluru with a total of 15 employees and three data science interns. The startup has so far made over 600 sales generating $10K-$13K (INR 7.5-9 lakhs) per month.
Currently, its platform is being used by approximately 12.5 Lakh users, processing between 7K-8K transactions on a daily basis. Its platform has crossed over 2.5 Mn transactions, the founders claimed. It charges businesses annually based on their number of outlets.
“Our prices range anywhere between $21-$58 (INR 1.5K-4K) per outlet, per month, and we bill clients annually. The price differs with the number of services Hashtag Loyalty is offering,” Dewan said, adding, “Most of our sales are done through organic references.”
Another stream of monetisation comes through ads on its platform. “We also use social media to target businesses, we do marketing with our clients and they, in turn, leverage the product to connect with users,” he added.
The startup has also initiated a proof-of-concept (POC) with Atom Technologies, India’s leading omnichannel payment service, to launch Atom Rewards — a coalition loyalty platform — across its partner network. The initial POC will involve close to 250 outlets primarily across Mumbai and Pune.
CRM Market In India: Growing With Players Like Zoho & Capillary Tech
US research and advisory firm Gartner estimated that global CRM software revenue amounted to $39.5 Bn in 2017. The Telegraph reported that the total addressable market for CRM is estimated at $706 Mn in India and is expected to grow at 18%.
Limesh Parekh, the CEO of Enjay IT Solutions, says that CRM tools collect customer data from various onboarding touchpoints like WhatsApp, social media, exhibitions, wearables, and product usage — which customers readily share by themselves — with minimum or no human intervention. This, in turn, saves the time required to enter data manually into the software.
As customers look for more personalised experiences, CRM is already witnessing an evolution with the use of artificial intelligence (AI) and analytics.
The SaaS behemoth and unicorn, Zoho CRM, recently unveiled Zia Voice, the first conversational AI for sales teams that adds speech and chat capabilities. It has also introduced Catalyst, a set of capabilities that allow larger and complex businesses to build their own mobile and web apps and additions to Zoho CRM.
Another major CRM player in India, Capillary Technologies, raised about $20 Mn funding and is using the proceeds in new product development, powered by AI and machine learning.
Apart from these, there is also a rising brigade of CRM startups in the country which includes names like Mera CRM, Cratio, Maple CRM, Sales Mantra, ClinchPad, enKast, Agentdesks, among others.
However, even with the space getting crowded with more players, Dewan feels that the CRM market in India is way beyond saturation for now. He added that Hashtag Loyalty, in the next six months, will focus on expanding its technology offering to a suite of products across the value chain for offline businesses, including an AI-powered marketing assistant and a social engagement platform.