Chennai-based SaaS unicorn Zoho has surpassed 100 Mn users across its various business applications, making it the first self-funded SaaS company to achieve this landmark. The company now serves over 700K businesses across 150 countries.

The SaaS unicorn saw its user base grow from 1 Mn in 2008 to 100 Mn in 2023. The company crossed $1 Bn in annual revenue last year. 

“This is an impressive milestone for any organisation, but it’s particularly sweet for us as a bootstrapped company that has never raised external capital. And we are not done yet. We have an impressive innovation pipeline covering the next 10 years and are investing in deep technologies to serve billions of users around the world. We’re working towards it, and we want to thank all of you for your continued support,” said Sridhar Vembu, cofounder and CEO of Zoho.

Best known for its online office suite applications, Zoho provides tools for customer relationship management (CRM), project management, social media management and so on.

Some of Zoho’s customers include startups like BYJU’S, MakeMyTrip, BigBasket, Paper Boat, Zomato and brands like PUMA, Axis Finance, Samsonite, Tata Play Fiber, Star Health & Allied Insurance, Mercedes-Benz India, SpiceJet, IIFL Finance, Meril Life Sciences, Blue Star, Bosch, Saint-Gobain, Deloitte and McDonald’s.

In addition to its core services, Zoho recently launched ‘Ulaa,’ a privacy-focused web browser designed to protect user data by blocking trackers and website surveillance.

Founded in 1996 by Vembu and Tony Thomas, Zoho has more than 12,000 employees globally. Despite a business slowdown, the bootstrapped unicorn posted a net profit of INR 2,749 Cr in FY22, registering a 43% jump from INR 1,917 Cr in FY21. 

The SaaS giant competes with the likes of Freshworks, Hubspot, Salesforce, Microsoft and many other Indian and international tech majors. Globally, Salesforce is the largest CRM by user base, with more than 150K companies served, including Walmart, Amazon, AWS and Spotify, among others. The company has also captured nearly 40% of the global cloud-based sales software.

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Early stage B2B SaaS-focused venture capital firm Pentathlon Ventures has announced the launch of its second fund, Fund II, with a target corpus of INR 450 Cr.

The fund aims to invest in 25 B2B SaaS startups across sectors, including enterprise digital transformation, ecommerce enablement, fintech, vertical SaaS, applied AI, sustainable tech and healthtech.

Founded in 2020, Pentathlon Ventures has backed 23 startups, including Deeptek, Rezolve, Spyne, Dista, TurboHire and ShopSe, among others, through its first fund. It had launched its first fund in 2021 with a corpus of INR 76 Cr.

Commenting on the fund’s investment thesis, Pentathlon Ventures’ managing partner Sandeep Chawda said, “The revenues coming from India-based B2B startups are expected to grow 25X in the next 8 years. With an impressive 50% faster time to revenue, better revenue predictability, and solid gross margins ranging between 70-80%, it presents extraordinary prospects of building sustainable businesses. In addition to these aspects, with our core expertise being in this space, early stage B2B SaaS companies built in India continue to be our primary investment thesis.”

For Fund II, Pentathlon Ventures is raising capital from a mix of domestic and global limited partners.

Speaking on Fund II, Pentathlon Ventures managing partner Gireendra Kasmalkar said, “A couple of decades back, India was known for offshore IT services. Later, B2C startups gained prominence because of India’s population/consumption story. Today, Indian B2B startups are on their way to becoming global leaders within this decade. Add to this the tailwinds from the global focus moving to India. We are truly on the cusp of a huge virtuous cycle.”

The VC firm’s fund launch comes when Indian startups have been struggling with a funding shortfall for the past 18 months or so, and not for a lack of funds available to investors. Per an Inc42 survey, which surveyed 70+ active VC firms in India, Indian VCs have only invested 26% of the capital they have accumulated and allocated for FY24, holding on to the rest.

To be sure, investors in India have launched or announced funds worth nearly $4 Bn since the start of 2023. Some of the latest fund announcements include MIXI’s $50 Mn CVC fund, CapFort Ventures’ INR 400 Cr fund and Good Capital’s $50 Mn fund, among others.

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Self-serve infrastructure management platform Facets.cloud has raised $4 Mn in a seed funding round led by 3one4 Capital.

100x Entrepreneurs (now Neon) and prominent angels like Abhinav Asthana, Pallav Nadhani, Aneesh Reddy, Krishna Mehra and Sreedhar Pedinneni, among others, also participated in this round of funding.

Facets.cloud aims to use this capital to expand in the US market, promote and advance the platform engineering philosophy, and enhance its product offerings.

Founded in 2021 by IIT Kharagpur alumni Anshul Sao, Pravanjan Choudhury and Rohit Raveendran, the startup helps improve developer productivity by streamlining cloud deployment workflows.

“Cloud delivery of products is an incidental complexity that businesses have to deal with, while their core innovation area is different. Anything that’s not core to your business and taking away your Developers’ time is noise and needs to be productised.” Pravanjan Choudhury, the founder and CEO of Facets.cloud said while explaining the problem they are trying to address with the platform. 

Facets.cloud streamlines all the cloud deployment processes into one generative internal developer platform. This makes it extremely simple for developers to self-serve their infrastructure needs.

Facets.cloud is currently used by companies like MPL, Treebo, Capillary Technologies and Purplle, among others.

“Facets is a game-changer for complex DevOps setups. By automating last-mile cloud delivery as a product, it empowers businesses with self-service infrastructure management, enabling enhanced efficiency and positioning them as industry leaders. Their approach to platform engineering and the innovative self-service platform has the potential to completely transform the landscape,” stated Anurag Ramdasan, the lead partner from 3one4 Capital.

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Close on the heels of Chandrayaan-3’s historic landing on the Moon, drone manufacturer DroneAcharya on Wednesday (August 23) also announced its foray into the spacetech industry.

In a press statement, the company said it successfully tested a reusable rocket launch vehicle, which attained an ‘altitude of 3 kms over the ground surface’. 

Speaking with Inc42, DroneAcharya’s founder and managing director Prateek Srivastava said that the launch was conducted on August 21 at a foreign location. The results of the flight were evaluated by the company in the wee hours of August 23. 

“This spacetech initiative by DroneAcharya directly compliments our existing drone tech solutions as the former correlates with the macro solutions of overall climatic studies while the latter deals with drone-based Imagery and on-ground situational studies,” said Srivastava.

Equipped within the launch vehicle were an air pressure sensor, a heat sensor, an internal combustion sensor, an air friction sensor, and a miniature parachute for onboard equipment recovery. The company claimed that it successfully landed the vehicle with the help of a parachute and was able to recover all vital sensors and equipment. 

As per the company, the objective of the test was to determine the burn rate of the solid propellant fuel between attaining an altitude of 3 kms and returning to the ground in ‘operational condition’.

Srivastava also told Inc42 that the company has been experimenting with the project for the past three months and ran simulations and trials before the test launch. He added that the company took help from a couple of ISRO employees, who helped formulate the test launch. 

The space launch vehicle, as per the founder, is 3 ft to 3.5 ft tall and uses a solid-fuel propellant with different sensors in its cavity. Going forward, DroneAcharya plans to increase the altitude to 10 kms and payload by 3X to collect atmospheric and meteorological data. It is eyeing the nano/ micro category of reusable rocket launch vehicles. 

This could enable the company to tap into wider applications including suborbital testing, aerodynamic designs, as well as aerospace system and parabolic testing. DroneAcharya is also looking to find use cases for the product to leverage data for climate and environmental studies.

“Our aim is CubeSats and NanoSats and we would like to have our own constellation for civilian, aircraft and defence purposes,” Srivastava said. 

The company wants to build a constellation of satellites high up in the sky and is targeting the B2C and B2G segments. 

Elaborating on a use case, he said that the vehicle could find usage in the meteorological department which has to send a balloon every day (along with sensors) in the sky to measure atmospheric parameters. Srivastava says that he wants to change this with a reusable launch vehicle, which can safely land on the ground with all sensors intact. 

The company claims that the launch vehicle was completely made from scratch in India and was ‘not expensive’ as against common perception. “Everything was made in India be it the body, the cylinder or the sensors. Even coding was done in Pune to ensure it was entirely a Made In India product,” Srivastava said. 

Lately, DroneAcharya has been scaling up its drone operations. In May, Srivastava said that the IPO helped the company secure ‘expansion funding’, allowing it to ‘think more audaciously when the opportunities present themselves’.

Founded by Srivastava in 2017, DroneAcharya offers an array of drone solutions and training programmes to its customers. 

The drone manufacturer continues to post healthy numbers. The Pune-based startup’s profits jumped 742% year-on-year (YoY) to INR 3.42 Cr in the financial year 2022-23 (FY23) against an operating revenue of INR 18.57 Cr.

Shares of DroneAcharya closed 1.91% down at INR 156.40 on the BSE SME platform on Wednesday (August 23).

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Indian adtech unicorn InMobi has acquired San Francisco-based adtech company Quantcast Choice – a consent management platform (CMP) that helps publishers align with the rapidly evolving global privacy regulations. The companies did not disclose the deal value.

This move is aimed at enhancing InMobi’s privacy management platform for mobile app and web publishers.

The plan is to integrate Quantcast Choice’s CMP) within InMobi’s publisher Software Development Kit (SDK) offering. This integration is designed to provide publishers with easier consent management,  improved data governance, and heightened privacy control. Such capabilities will empower publishers to navigate the complex global privacy landscape more effectively.

Founded in 2006, the global adtech company Quantcast Choice has supported over 500 Google-certified, 800 Interactive Advertising Bureau-approved (IAB) vendors, and non-certified vendors specific to publishers’ needs. 

InMobi said that this inclusive approach helps publishers increase monetisation, higher fill rates, and sometimes, up to a 35% boost in eCPMs in certain regions. 

“This acquisition allows us to bring the power of a proven world-class CMP into the in-app ecosystem where the challenges remain enormous and unresolved,” said Kunal Nagpal, chief business officer at InMobi Advertising.  

With privacy regulations like General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) evolving, CMPs have become critical for publishers to ensure compliance and maintain ad revenue. As per InMobi, the absence of a proven CMP often leads to missed opportunities, as major global demand partners require the use of a CMP compliant with the latest privacy standards maintained by IAB.

Quantcast Choice often considered a “gold standard” for web publishers, will now be extended to the 40,000 mobile apps currently collaborating with InMobi.

As part of the deal, InMobi will uphold the free availability of the platform for existing customers while also trying to extend the same to both existing and new customers.

The transition of Quantcast Choice customers to InMobi’s offering is expected to begin in the coming months.

“InMobi understands the needs of publishers and we’re delighted that this market-leading CMP will continue to be available as a free solution. We remain committed to our customers and have formed a close partnership with InMobi to ensure a seamless transition,” said Peter Day, CTO at Quantcast.

Founded in 2007 by Naveen Tewari, Piyush Shah, and Abhay Singhal, InMobi has grown to become a leading marketing and monetisation technology provider in India and worldwide. Headquartered in Singapore, the company maintains a significant presence in Bengaluru and San Francisco. It also has operations in New York, Chicago, Kansas City, Los Angeles, Delhi, Mumbai, Beijing, London, Dubai, and several other locations.

InMobi’s unconsolidated subsidiary Glance is a lock screen-based content discovery platform. Its video platform Roposo, which was acquired by Glance in 2019, helps InMobi create new content and commerce experiences.

As per a report earlier this year, InMobi-owned Glance was eyeing expansion in the US and Latin America in 2023.

Meanwhile, InMobi also laid off around 50-70 employees or about 3% of its workforce this year.

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Bengaluru-based SaaS startup Capillary Technologies has elevated Anant Choubey and Sridhar Bollam to the position of cofounder. Choubey and Bollam joined the SaaS startup in 2010, serving as COO and chief customer officer (CCO) in their present roles, respectively.

Both Choubey and Bollam are IIT Kharagpur graduates. While Choubey joined the SaaS startup as COO from Proctor & Gamble, Bollam held various consultancy roles before coming to Capillary as VP of Analytics. Bollam was promoted to the CCO role in May 2023.

Aneesh Reddy, founder and MD of Capillary, said, “Anant and Sridhar have been nothing less than a cofounder, right from the onset. Anant with the entire profitability drive in the last couple of years and with Sridhar as the Chief Customer Officer in the US, we’ve been able to turn things around after COVID. We tremendously value their role in the organisation and I’m sure the company will continue to thrive under their leadership.”

Founded in 2012, Capillary is an end-to-end customer loyalty platform which offers a comprehensive 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, with a reach of 1 Bn+ consumers and processing 5 Bn+ transactions annually.

The startup has a presence in over 30 countries, including — the US, India, the Middle East and South East Asia.

Speaking on the development, Anant Choubey said, “It has been an incredible journey with this exceptional team and I am excited about the opportunities that lie ahead. I look forward to continuing our pursuit of excellence and strengthening our standing in the global loyalty technology space.”

Sridhar Bollam added, “Capillary has been family right from the onset. Roles and designations haven’t really mattered because the vision and mission have always been larger than anything else! We have great momentum behind our backs and are looking forward to gaining a larger share of this massive customer loyalty and engagement market.” 

The development comes months after Capillary deferred its IPO plans by 18-36 months. The SaaS startup raised a $45 Mn Series D funding round from Avataar Ventures and its limited partners (Pantheon, 57Stars, and Unigestion), Filter Capital and Innoven Capital.

Following the fundraise, Capillary Technologies acquired Tenerity’s product Digital Connect to strengthen its position in the US and European markets by acquiring the reward ecosystem that Digital Connect enables on its platform.

Capillary slipped into the red in FY22, reporting a standalone net loss of INR 22.2 Cr, 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 FY22 compared to INR 114.9 Cr in FY21.

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Caller identification app Truecaller has reportedly launched an artificial intelligence (AI)-based feature called Truecaller Assistant to help users answer calls. Currently, the assistant can converse in Hindi, English, and the Indianised ‘Hinglish’ languages in India. 

Calling Truecaller Assistant an innovative version of answering machines, Truecaller India MD Rishit Jhunjhunwala told Economic Times that it can answer calls on behalf of users.

Users can also get real-time transcriptions of the caller’s conversation with the AI-powered bot. 

Initially the feature will be available for Android users only, and will be made available for iOS soon. The company also plans to incorporate more Indian languages into the system.

The feature was first launched in the US and was then expanded across other markets globally. Jhunjhunwala said that even though Truecaller filters out the spam calls, users often get disturbed by such calls. He said the AI assistant will help manage and avoid such calls. 

It must be noted that India is one of the most important markets for Truecaller. The company’s active users crossed the 250 Mn mark in the country earlier this year. In May, CEO and cofounder Alan Mamedi said that there is a lot of scope for the company to grow in India. 

The Indian market accounted for more than 75% of Truecaller’s revenue in Q1 2023. Though net sales in India declined 1%, the overall revenue generated from the market stood at $37.49 Mn. 

Meanwhile, Truecaller, in a statement, welcomed the Digital Personal Data Protection Bill passed by the government.

“We stay committed to our mission of making communication safe in India and around the world and will comply with all provisions of the upcoming regulations. We are positive about the bill, which provides clarity and long-term conditions, and our assessment remains that the new law will not affect the user experience in any significant manner,” Mamedi said.

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The chief human resource officer (CHRO), Sumar Gopalan, and the chief marketing officer (CMO), Stacey Epstein, have reportedly put down their papers at NASDAQ-listed SaaS unicorn Freshworks. According to a report by The Captable, the two executives will leave the organisation in the coming days.

Confirming the development to Moneycontrol, CHRO Gopalan said, “Having gone through this amazing and intense journey over the last five and half years, I felt it was the right time for me to step out of my comfort zone and embark on a new adventure.”  

In a statement, Freshworks noted that the two executives were moving on ‘independently’ of one another, adding that it has been looking at possible replacements.

“After years of being an integral part of Freshworks, Suman and Stacey have independently decided to move on from Freshworks. For the last few months, they’ve continued their responsibilities while supporting the searches to find strong replacements and ensure seamless transitions for their teams,” the listed SaaS giant said.

Freshworks has already appointed a new CHRO, the company said, without revealing the name of the top-level executive.

“We’ve already selected a new CHRO who will start at the end of August and we’re actively evaluating CMO candidates. We are grateful for their years of hard work taking us through IPO and life as a public company, and the foundation Suman and Stacey have established for the future success of Freshworks,” the SaaS major said.

Freshworks is now looking to appoint a new CMO in the coming months.

The development comes a week after the startup reported a net loss of $35.66 Mn in the quarter ended June 30, 2023, down 48.9% year-on-year (YoY). Freshworks reported an adjusted operating profit for the first time in the January-March quarter of 2023, posting a non-GAAP profit of $3.88 Mn.

The development comes nearly a year after the company’s cofounder and CTO Shan Krishnaswamy left the company last September.

The company also saw senior-level layoffs towards the end of the June quarter, though it had denied any company-wide layoffs. The retrenchments happened within senior positions in the company’s product, engineering and go-to-market (GTM) teams.

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Traveltech SaaS startup RateGain’s profit after tax (PAT) almost tripled to INR 24.9 Cr in the June quarter of the financial year 2023-24 (FY24) from INR 8.4 Cr reported in the year-ago quarter as the travel demand continues to grow steadily.

However, this was an over 26% decline on a quarter-on-quarter (QoQ) basis from INR 33.8 Cr. The bottom line was hurt sequentially due to increased taxes. While the company paid INR 9.1 Cr as current tax as against INR 2.8 Cr in Q4 FY23, its deferred tax was INR 1.9 Cr versus INR 10.8 Cr in the preceding quarter.

RateGain reported a 79.8% YoY jump in operating revenue to INR 214.5 Cr in Q1 FY24, which also grew over 17% from INR 182.9 Cr in the preceding quarter.

Data as a Services (Daas) contributed INR 70.6 Cr to the operating revenue, while distribution and martech contributed INR 50.7 Cr and INR 93.2 Cr, respectively.

Revenue maximisation solutions provided by RateGain continue to find favour with key clients across the travel and hospitality space who are looking to drive digitisation and provide their guests with a better omnichannel experience, drive efficiencies, and optimise their revenue, the company said in a statement.

RateGain’s EBITDA margin also expanded to 17.6% in Q1 FY24 from 10% in the corresponding quarter of last year.

“We saw another great quarter with tremendous growth basis addition of new clients and expansion within our key accounts. With people’s attitudes changing towards having more experiences, travel industry at macro level continues to witness robust demand,” said Bhanu Chopra, founder and chairman of RateGain, in a statement.

“We are now focusing on our next big goal of doubling revenues in the next three years as we continue to witness robust traction with key clients and add new logos to propel our future growth. We have already started building the organisation we need to accelerate RateGain towards that goal,” he added.

On the expenses side, the startup’s total expenditure jumped 62.3% YoY and 16.3% QoQ to INR 118.3 Cr in the quarter under review.

Employee benefit costs continued to be the single biggest contributor to total expenses during the period. RateGain spent almost INR 88 Cr on employee benefits during the quarter under review, as against INR 76.7 Cr in the preceding March quarter of FY23.

Meanwhile, the company said it continues to add to its headcount with a current global team of 727. The number stood at 713 at the end of March 2023.

Other expenses also increased to INR 88.7 Cr in  Q1 FY24 from INR 74 Cr in the preceding quarter.

Following the announcement of results, shares of RateGain jumped as much as 10% to INR 511 on the BSE during the intraday trading. The stock ended the session 4.7% higher at INR 486.

With an eye on expanding its business further in the Americas region and penetrating further into large enterprises, RateGain also announced the appointment of Peter Strebel as the new president of Americas. He will lead its DaaS, distribution, and martech offerings in the region. 

Strebel earlier served as the chairman and president of Omni Hotels and president of Wyndham Hotels. He has over 30 years of industry experience.

RateGain’s loan-to-value (LTV) to customer acquisition cost (CAC) for Q1 FY24 stood at 13.4X and the revenue per employee at INR 1.2 Cr. 

The company’s annual recurring revenue grew to an all-time high of INR 857.9 Cr during the period under review, it claimed.

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NASDAQ-listed Indian SaaS unicorn Freshworks has reported a net loss of $35.66 Mn in the quarter ended June 30, 2023 (Q2 2023), down 48.9% year-on-year (YoY) compared to $69.75 Mn in the corresponding quarter in 2022, off the back of improving revenue and falling costs.

Incidentally, Freshworks had reported an adjusted operating profit for the first time in the January-March quarter of 2023, posting a non-GAAP (Generally Acceptable Accounting Practices) profit of $3.88 Mn during the quarter.

The SaaS unicorn reported revenue of $145.08 Mn during Q2 2023 (April to June), growing 19% YoY from $121.43 Mn reported in Q2 2022. Freshworks said that adjusting for constant currency, the revenue was up 20% YoY. 

The revenue growth can be mostly attributed to the number of customers contributing more than $5,000 in annual recurring revenue (ARR), hitting 19,105, a jump of 18% YoY.

At the same time, Freshworks managed to shave off its operating expenses by about $1.21 Mn, coming down from $164.72 Mn in Q2 2022 to $163.51 Mn in Q2 2023. Quarterly, the operating expenses rose 2%, compared to $160.56 Mn in Q1 2023.

The SaaS unicorn also saw minor improvement in sales and marketing expenses and research and development.

Freshworks reported a free cash flow of $18.1 Mn, compared to -$10.2 Mn in the second quarter of 2022.

“Freshworks is building on the foundations we set at the start of the year to deliver faster product innovation and improve our efficiency,” said Girish Mathrubootham, CEO and founder of Freshworks on the results.

The SaaS giant also launched three new generative AI products – Freddy Self Service, Freddy Copilot and Freddy Insights – during the quarter. Speaking on the same, Mathrubootham added, “In Q2, we launched new generative AI enhancements across our product lines and outperformed our estimates across all our key financial metrics.”

Freshworks also saw layoffs towards the end of the quarter ended June 30, 2023, though the company had denied any company-wide layoffs during the time. The retrenchments reportedly happened within senior positions in the SaaS unicorn’s product, engineering and go-to-market (GTM) teams.

Founded in 2010 by Girish Mathrubootham and Shanmugam Krishnasamy, Freshworks offers a suite of software for customer service and support, customer engagement and IT service management. The company went public in 2021, though its share price has been in freefall since hitting a peak of $50.25 in October 2021.

The SaaS unicorn’s share price stood at $18.24 during Tuesday’s close, giving it a market cap of $5.31 Bn.

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Market intelligence startup Tracxn Technologies’ net profit nearly halved quarter-on-quarter (QoQ) to INR 0.69 Cr in the first quarter of financial year 2023-24 (FY24). 

The startup reported a profit of INR 1.36 Cr, excluding IPO expenses and deferred tax windfall of INR 23.26 Cr in Q4 FY23. 

Tracxn’s Q1 FY24 profit during the quarter also declined 18% from INR 0.84 Cr in Q1 FY23. 

Revenue from operations fell 2.5% to INR 19.82 Cr in Q1 FY24 from INR 20.34 Cr in the previous quarter. However, on a year-on-year (YoY) basis, it rose 8% from INR 18.4 Cr. 

The company said that revenue grew at a slower pace during the quarter but it would have ‘marginal impact on margins’, adding that it witnessed acceleration in deferred revenue growth in Q1 FY24. 

A major chunk of its revenue came from international clients during the quarter ended June 2023. They accounted for nearly two-thirds of the total revenue. The US, Singapore, Germany and the UK were the top contributors to the revenue. India contributed the remaining 33% to the startup’s topline. 

Tracxn’s EBITDA during the quarter declined to INR 0.02 Cr from INR 0.19 Cr in the year-ago period and INR 0.69 Cr in Q4 FY23. On similar lines, EBITDA margin contracted to 0.1% in Q1 FY24 from 1.01%% in Q1 FY23 and 3.42% in Q4 FY23. 

Meanwhile, total expenses rose nearly 9% to INR 19.85 Cr in the quarter under review from  INR 18.24 Cr in the corresponding quarter last year. However, the increase was marginal on a QoQ basis from INR 19.71 Cr. 

The startup said that the growth in expenses ‘eased’ in Q1 FY24 as it reduced the headcount QoQ. However, employee benefit expenses still accounted for more than 87% of the total spending during the quarter under review. Non-cash ESOP expenses stood at INR 0.9 Cr during the quarter.

The company’s headcount declined to 825 at the end of Q1 FY24 from 892 at the end of Q4 FY23, which it attributed to optimisation of workforce due to automation and efficiency initiatives.

The startup’s free cash flow declined to INR 0.6 Cr, while its total cash and cash equivalents stood at INR 61.9 Cr at the end of Q1 FY24. 

Meanwhile, Tracxn said that its key operational metrics continued to see an upswing during the quarter. The number of customer accounts jumped 9% YoY to 1,236, while the number of users on the platform jumped 6% on a yearly basis to 3,467. 

The startup claimed that its contract price continued to see an uptick, rising 13% to INR 21.4 Cr in Q1 FY24 from INR 18.9 Cr in Q1 FY23. It claims to have so far profiled 2.3 Mn entities on its platform. 

Speaking about its growth initiatives, the company, in an investor presentation, said, “… we have been investing across various growth initiatives. These span across the go-to-market funnel of marketing, sales and account expansion… We believe as the markets open up further, we should see more acceleration than previously in new customer acquisition as well as customer expansion.”

Founded in 2012, Tracxn is the brainchild of Neha Singh and Abhishek Goyal. The market intelligence platform offers a SaaS-based tool that tracks company financials and captables of entities. It has customers in over 50 countries.

The results were declared after  market hours on Tuesday. The startup’s shares closed 1.44% higher at INR 86.83 on the BSE today.

The post Tracxn’s Q1 Net Profit Halves QoQ To INR 69 Lakh, Revenue Slips 2.5% appeared first on Inc42 Media.

US-based asset management company Fidelity Investments has once again slashed the valuation of SaaS unicorn Gupshup. The company’s valuation has been cut by more than 20% between May and June. 

Fidelity has now valued its holding in Gupshup at $8.08 Mn, at the end of June, trimming it from $10.15 Mn at the end of May this year, according to Fidelity’s monthly disclosure with the US Securities and Exchange Commission (SEC).

In May, Fidelity slashed the fair value of its holding in the Indian startup by 8.4% from $11 Mn as of April 28, 2023.

Meanwhile, the latest investment valuation of Fidelity has seen an over 50% cut from $16.2 Mn — the amount that the former had originally invested in Gupshup in mid-2021. The funding round valued Gupshup at $1.4 Bn.

As per the Economic Times, the updated valuation of Fidelity’s holding in Gupshup also lowers the entity’s total valuation to $697 Mn, snatching its unicorn tag.

Founded in 2004 by Beerud Sheth, Gupshup is a conversational messaging platform that enables companies to enhance customer experience. The startup is said to send over 7 Bn messages per month to enable conversations with customers. It also counts major Indian banks and unicorns, including IndusInd Bank, HDFC Bank, Zomato, Ola, and Flipkart, as its clients.

Gupshup last raised $340 Mn in 2021 with participation from Fidelity Management and Research, along with marquee investors like Tiger Global, Malabar Investments, Think Investments, and Harbor Spring Capital, among others.

Gupshup reported a consolidated net profit of INR 39.9 Cr in FY22, down from INR 52.5 Cr in FY21 while its total revenue increased 53% year-on-year to INR 1,140.7 Cr.

Amid a severe funding winter and weakening investor sentiment towards tech startups globally, several companies have witnessed back-to-back valuation cuts by their top investors.

In May this year, Invesco cut the valuation of its holding in Swiggy, valuing it at $5.5 Bn, which stood at $10.7 Bn in January last year.

BlackRock cut the valuation of BYJU’S by nearly half to $11.5 Bn. Now, Peak XV Partners is also reportedly looking to significantly mark down the fair value of its investment in the edtech giant.

In May, Fidelity also slashed the fair value of ecommerce unicorn Meesho by 9.7%. It also marked down the valuation of fintech major Pine Labs by about 9.2% to $4.5 Bn.

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Cybersecurity startup PingSafe has raised $3.3 Mn in a seed funding round led by Peak XV Partners (formerly Sequoia Capital India) and its accelerator programme Surge. 

The funding round also saw participation from several prominent angel investors, including PhonePe cofounder Rahul Chari, Neeraj Arora (former chief business officer of WhatsApp), Pratyus Patnaik (senior director, engineering, Okta), SquareX founder Vivek Ramachandran, Tata 1mg cofounder & CTO Gaurav Agarwal, Recko cofounder Saurya Prakash, and Tanglin Ventures.

The startup will use the funding to further expand its footprint across North America and Southeast Asia. 

Founded in 2021 by Anand Prakash and Nishant Mittal, PingSafe aims to be a one-stop shop platform for all cloud security-related enterprise needs. The platform uses cloud APIs and logs to collect information and detect exploitable vulnerabilities without human intervention. 

The startup claims to have quadrupled its user base in the past 12 months, and caters to big names such as Flipkart, Razorpay, PolicyBazaar, SBI General, Tata 1mg, among others. It also claims to have grown its revenues 10X in the last one year across multiple geographies and verticals. 

“Having discovered thousands of critical vulnerabilities in leading companies, we understand the mindset of hackers. At PingSafe, we incorporate this unique perspective into our CNAPP platform by adding capabilities like the Offensive Security Engine that identifies the most critical vulnerabilities and provides proof of exploitability, reducing the overhead of security teams…,” PingSafe cofounder and CEO Anand Prakash said.

Commenting on the development, investor Rahul Chari said, “… PingSafe’s team is highly motivated and has the right market experience to make PingSafe a leader in this space. I have witnessed the unwavering passion that Anand and Nishant possess to solve this problem, and seeing the customer validation for PingSafe, I am proud to support them in this journey.”

As cybersecurity risks associated with cloud migration see an uptick, PingSafe claims to be well-positioned to cater to the burgeoning cloud security market. Notably, the cybersecurity space has seen multiple high-ticket deals in the recent past. 

In April, cybersecurity startup CYFIRMA secured $5.5 Mn in its pre-Series B funding round from Israel-based VC fund OurCrowd L&T Innovation Fund. Days later, another startup Safe Security raised $50 Mn as part of its Series B funding round led by Sorenson Capital. 

PingSafe operates within the Cloud Native Application Protection Platform (CNAPP) segment of the cybersecurity domain. As per a report, the CNAPP industry’s market size was estimated to be approximately $8 Bn, fueled largely by the growing adoption of cloud networks and intensity of cybercrimes.

The post PingSafe Bags Funding From Peak XV To Scale Enterprise Cloud Security Offerings appeared first on Inc42 Media.

Almost 19 months after it raised $12 Mn in its Series A round, fraud detection startup Bureau on Tuesday (July 18) said it has bagged an additional $4.5 Mn as part of the same round. 

Early stage VC firm GMO Venture Partners and other existing investors participated in this round, taking the startup’s total Series A round to $16.5 Mn. 

Besides funding, Bureau also said it has completed the acquisition of Y-Combinator backed identity verification startup inVOID. It said the acquisition would help it expand its global coverage, widen its IP scope and expand tech stack.

Founded by Ranjan Reddy in 2020, Bureau helps businesses onboard customers and check through disparate data to prevent fraud and manage compliance. The startup provides banks, fintech, gaming, gig economy and ecommerce companies with a complete range of identity verification, fraud prevention and detection, and risk and compliance solutions. As per its website, Uni Cards, IIFL Finance, Bajaj Finserv, and ixigo are among its customers.

Bureau claims to have verified over 300 Mn digital identity on its platform since its inception two years ago. 

The startup’s earlier $12 Mn Series A funding round was led by Quona Capital. It also saw participation from Commerce Ventures, Okta Identity, and angel investors Mark Britto, EVP Chief Product Officer at Paypal, and Bobby Mehta, former president and CEO of Transunion. Its existing investors then – XYZ Ventures, Blume Ventures, Village Global, EMVC and Sweat Equity Ventures, among others – also participated in the round. 

In August 2020, the startup also raised a seed round of $4.2 Mn. 

Bureau currently competes with the likes of IDfy, Signzy, Helloverify, and Karza Technologies, among others.  

Over the years, enterprises have turned digital, with Covid-19 pandemic further accelerating this shift. However, cyber frauds have emerged as a major risk and it is necessary for companies to take measures to prevent such frauds. As per reports, damages caused by cyber frauds could cost $1 Tn on an annual basis by 2025.

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Enterprisetech startup for B2B marketing, Factors.ai has secured $3.6 Mn in a pre-Series A funding round led by Stellaris Venture Partners. Existing investors including Elevation Capital and Emergent Ventures also participated in the round.

Besides, angel investors including Vetri Vellore, founder of Microsoft-acquired Ally.io, Sreedhar Peddineni, cofounder and chief executive of GTM Buddy, Khadim Batti, cofounder and CEO of Whatfix and others were also part of the funding round.

Founded in 2020 by Aravind Murthy, Praveen Das and Srikrishna Swaminathan, the US-based startup helps B2B marketing teams to make use of their diverse customer data and make decisions accordingly. It leverages this data to enable sales teams to target the right accounts at the right time, maximising pipeline generation. 

The startup offers account intelligence, individual account analysis, sales funnel and revenue attribution. Factors.ai primarily has a clientele spread across India and the US. 

According to the startup, Factors.ai aims to use the freshly raised funds to scale its teams, including sales, marketing, and customer success. Additionally, it also plans to strengthen its product and engineering divisions.

Commenting on the funding round, cofounder  Swaminathan said, “With our industry-leading solutions, we are poised to make a profound impact by facilitating efficient pipeline growth, bridging the gap between sales and marketing, and delivering value to our customers. We also plan to achieve profitability and expand our customer base.”

In August 2021, the startup had bagged $2 Mn seed funding from its existing investors Elevation Capital and Emergent Ventures. 

With increased dependence on technology for business processes, enterprisetech startups have grown in India. According to Inc42’s data, the industry secured an impressive $7.2 Bn in funding in over 500 deals in 2021 and 2022.

Earlier this month, B2B cloud manufacturing startup Frigate bagged $1.5 Mn seed funding to  scale up its digital manufacturing ecosystem to cater to clients globally. 

Yet another enterprisetech startup, which also happens to be one of the competitors of Factors.ai, PYOR bagged $4 Mn seed funding led by Castle Island Ventures to enhance its core infrastructure expansion and product platform.

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India’s enterprise tech startup ecosystem has seen remarkable growth in recent years, attracting significant investments from both domestic and global investors. Since January 2014, these startups have raised a staggering $13 Bn across more than 1,600 deals. The sector reached its peak in 2021 and 2022, securing an impressive $7.2 Bn in funding in over 500 deals.

What sets this sector apart from other sectors such as consumer services, ecommerce, edtech, and fintech, among others, is its profitability quotient, as 50% of the total 14 unicorns in this sector are in the black. This high profitability percentage highlights the sector’s potential for sustainable growth and return on investment. This paved the way for investors to remain bullish on the sector in the first half (H1) of 2023.

According to Inc42’s Indian Startup Funding Report H1 2023, the enterprise tech sector saw the maximum acquisitions during the period under review. Of the total 67 acquisitions in H1, one-third, or nearly 23 acquisitions, were from the enterprise tech sector alone.

“This is good. Getting exits only proves that solutions which have been built by founders and supported by investors are real solutions and are in demand. In a way India is moving away from just consumer tech businesses to real businesses,” said Anil Joshi, Managing Partner of Unicorn India Ventures.

Key Reasons Triggering Consolidations In The Space

Since the onset of the pandemic in 2020, the wave of digitalisation and technology adoption has made 64 Mn Indian MSMEs a lucrative market both for tech leaders and investors. As a result, the domestic enterprise tech ecosystem in the country has created a number of business opportunities for startups at all stages.

The rising investor ecosystem supported this bandwagon of emerging startups, giving the founders the freedom to create innovative solutions. Earlier there were just a handful of VCs who would invest in the core enterprise tech space, however, today 2,000-plus investors, including domestic investors like Blume Ventures, Indian Angel Network, Better Capital among others consider enterprise tech as a high-potential bet.

Despite this, the experts that Inc42 spoke with believe that much is to be done to make the solutions, emerging from this space, scalable if we want to see more soonicorns and unicorns in this realm.

Even if an enterprise is flush with funds and resources, it still makes sense for it to join hands with a larger organisation to grow faster, we were told.

“Both investors and founders are aware that an exit at the right time can make them get good returns, as beyond a point, a company becomes non-viable,” Anil said.

Further, most of the tech-enabled businesses were groomed much faster during the pandemic because they were able to render services remotely and capture foreign markets.

A clear example of this is Indian enterprises acquiring international startups. It is pertinent to note that a few years ago most acquisitions that took place in the Indian enterprise tech space were mostly led by US investors or companies, but this trend is now changing.

In the last six months, we have seen many Indian startups acquiring US-based startups in the sector. For instance, Noida-based RateGain acquired US-based Adara in January 2023. Similarly, Bengaluru-based BetterPlace acquired Jakarta’s MyRobin in February 2023. These are just two of the many examples of Indian enterprise tech startups championing the acquisition arena.

How Good Or Bad Is This For The Indian Enterprise Tech Sector?

Mergers and acquisitions is a common business strategy. Given that markets are tight, funding and payment cycles have become longer and the macroeconomics landscape is uncertain outside of India, there is no better time to consolidate.

“In this situation, if a startup does not have enough cash runway to support the business functions and is looking to raise funding, then it’s high time to think about an acquisition opportunity,” said Monish Darda, CTO and cofounder of enterprise tech unicorn Icertis.

One of the positive sides of consolidation is that it helps create many serial entrepreneurs as well as investors in the sector. Once the acquisition lock-in period expires, which usually takes one to three years, entrepreneurs are free to deploy their golden parachute in any way they please — either to become an investor or start a new venture.

While Mukesh Bansal launched Cure.Fit, now a healthtech unicorn, in 2016 after selling Myntra to Flipkart in 2014. Similarly, Flipkart founders Sachin and Binny Bansal announced to set up VC funds worth $1 Bn and $400 Mn, respectively, after Walmart bought Flipkart for $16 Bn in 2018.

Also, when an entrepreneur joins a startup’s board as an investor or starts a new venture, they immediately gain credibility from the ecosystem because they have already gone through the churn and have proven their mettle before.

Can India Grow As An Enterprise Market?

India’s potential as an enterprise market has evolved significantly. Previously, challenges such as cheap labour, lack of automation, price sensitivity, and low technology adoption pushed Indian enterprise tech startups to seek markets beyond the country’s borders.

However, the ecosystem is now optimistic about various verticals such as health tech, AI, ML, blockchain, and cybersecurity. The focus on efficiency, digital transformation, contract lifecycle management, and cost-saving solutions has positioned Indian startups to address global enterprise needs effectively. Furthermore, the advent of new technology is expected to revolutionise how enterprises operate.

“Apart from that, within the application of technology, creating a robust and frictionless user experience as well as switching to a low code/ no code approach, allowing users to do more in the platform without needing help from tech on it, will be the two key things the ecosystem will need,” Icertis’s Darda said.

In the investor ecosystem, established venture capitalists are increasingly recognising the potential of enterprise tech startups. They now understand that startups in this sector can address global demands while maintaining predictable revenue streams and lower cash burns. This allows investors to take calculated risks and informed decisions while investing.

Finally, with many global VCs looking at India as an opportunity, we are likely to see more investments and deals in the sector even in the second half of the year, purely due to low risks and decent returns.

The post Indian Enterprise Tech Sector Witnesses Surge In M&As: H1 2023 Report appeared first on Inc42 Media.

It’s not often that a company raises its first external round 17 years after inception, especially if it continues to rake in profits, but that’s exactly what Kaar Tech did last week, when it raised $30 Mn led by A91 Partners.

In an ocean of startups and in the burgeoning enterprisetech space, Kaar Tech has flown under the radar after being founded in 2006 and has plugged away at the digital transformation space in key geographies with a bootstrapped approach. All while building its products and tech platform from India.

The company’s first fundraise is something of a surprise in a year when total startup funding has plummeted by 72% (YoY), but in other ways it’s not really surprising given that investors are largely focussing on sustainable business models. With profits in the past several years, Kaar Tech certainly stands out among loss-making startups.

Cofounder and CEO Maran Nagarajan told Inc42 that the company has not done anything different in the past couple of years even as other tech companies have had to reassess lines of business and cut back on workforce or spending.

Kaar Tech was founded by Maran Nagarajan, Ratnakumar Nagarajan, Selvakumaran Manickam and Gaurdian George in 2006 and initially focussed largely on the SAP consulting opportunity and built its core around SAP S4/HANA, which is an enterprise resource planning software used by large manufacturers and enterprises to streamline operations.

“All of us founders spent more than a decade in Western countries in various tech and consulting roles — the US, the Netherlands, Singapore and the Middle East. So we had a good idea of what companies in these geographies needed. When we came back to India in 2006, we decided to focus on the SAP and SAP S4/HANA space, which was our strength.” – Kaar Tech CEO Maran Nagarajan

Kaar Tech’s Digital Transformation Suite

SAP consulting typically involves enabling companies to streamline processes and get a clear view on the utilisation of its resources across any operational activity. The typical customer profile for Kaar Tech are companies in the manufacturing space where the digital transformation wave has truly embedded itself.

Elaborating on the SAP-centric solutions, Maran said that for enterprises in any discrete manufacturing vertical leverage SAP S4/HANA is the core, covering everything from financials, human capital management, inventory management, manufacturing, distribution and logistics to supply chain management. Kaar Tech has built its domain expertise in these core areas over the past 16 years.

The Chennai-headquartered company has focussed largely on SAP for most of its lifetime, and only ventured into other areas in 2022, given the broader needs of its target base of enterprises. As digital transformation needs burgeoned, so did Kaar Tech’s suite of offerings for companies.

“We gradually shifted into other areas that can also be offered as a horizontal service. We now offer our platform for data engineering, cloud engineering, product engineering and business process management, which have been in place for just over a year now,” Maran added.

Besides the core areas, Kaar Tech offers edge tech solutions for HR and talent management, financial supply chain solutions, warehouse management, third party logistics and transportation management, vendor management, forecast planning, customer relationship management, marketing, customer data management and more.

“There is a third layer that is ‘beyond edge tech’. Here we are talking about AI or ML-based solutions, or blockchain or process automation through robotics. These are all point solutions depending on which component of the business has engaged us,” Maran said, adding that most of these pieces have been added gradually after Kaar Tech had established domain expertise in SAP.

The idea is that when large enterprises eye digital transformation, they tend to require holistic engagement and end-to-end solutions. The company typically targets enterprises with market caps of between $500 Mn to $5 Bn as this allows Kaar Tech to cast a wider net in terms of the customer base, but also allows the company to focus on more sectors.

Currently, the company is working on 90 active projects, with over 300 enterprise customers served since inception.

Maran added that each project can bring in between $1 Mn to $10 Mn in revenue depending on the degree of engagement by Kaar Tech’s team of consultants and engineers. In FY23, the company claims to have earned INR 350 Cr in revenue with a profit of INR 65 Cr, up from INR 41 Cr in FY22.

Inc42 has not seen the company’s FY23 financials to independently verify the claimed profit amount.

Eyeing Acquisitions In The US

Of course, the fundraise changes things from the point of view of growth and scale, and the expansion into new horizontal areas in large part prompted the decision to raise funds, after more than a decade of being bootstrapped.

As it entered the horizontal space, Kaar Tech realised the need to add more pieces to its tech platform. One way is to acquire companies that fit the puzzle, which is the primary objective of the first round raised by the company.

“We would like to do an acquisition to strengthen the areas we have recently entered. This is likely to be in the data engineering or business process management space. And we are also  looking at the digital commerce space very closely where we are in advanced talks to acquire a company,” Maran told Inc42.

Maran added that the latter acquisition will be funded by the company’s generated profits, whereas A91’s funds will be used to acquire a data engineering or BPM company. He added that in the last two years, Kaar Tech has doubled its profits and that’s the objective for the next 24 months as well before a potential IPO.

Setting Targets For IPO Run

Kaar Tech’s primary competition is the likes of Yash Technologies, IBM, TCS, Wipro, Indus Novateur, NTT Data, Accenture, Deloitte, Capgemini, among other IT services giants. However, on a region-to-region basis, the company has a host of competitors that go beyond these names.

Maran claimed that Kaar Tech’s differentiation comes from the size of the companies that it targets for its digital transformation products and solutions. And this allows Kaar Tech to expand faster than some of its competitors and be more agile in its solutions.

As in the case of most B2B enterprise tech products, Kaar Tech earns most of its revenue outside India. CEO Maran has relocated to the US, for instance, to handle the projected business growth in the North American market, and cofounder George is primarily based in Europe to manage the EU business.

Maran believes that given the profile of clients in the Middle East — including the likes of petrochemical giant Aramco — there is a lot of organic customer acquisition happening in that region. However, the big focus will be on the US market, which is also one of the primary factors for the company’s push for inorganic growth through M&As in North America.

As far as India is concerned, the biggest challenge comes from the fact that Indian businesses do not yet have the maturity to implement large-scale digital transformation projects. “We have not had Indian customers after 2012 or 2013, because if you look at the service margins we expect, Indian businesses do not rise up to our benchmarks and the scarcity mindset is also a challenge when looking at revenue expectations from India.”

Essentially, the people-reliant consulting business does not suit Kaar Tech’s revenue expectations, where most of its employees have billable roles. “We assign people to certain projects and deploy people within large enterprises, so we want to operate with better margins, paying terms and milestones. So that’s why our scope was higher in the Middle East and will continue to be so in the US and Europe.”

The A91 investment is also likely to be the final external round that Kaar Tech raises before hitting the public markets by 2026, according to the CEO. The plan is to target the quarter between December 2025 and March 2026 with Indian and US listing both an equal possibility at the moment.

Kaar Tech is targeting a revenue base of INR 1,000 Cr by the time it lists, and plans to double its workforce by then to 5,000 employees in India and Southeast Asia.

Maran told us that the company fancies its chances for a potential Nasdaq listing, because it anticipates that 40%-50% of the revenue will come from the US by 2026 and most of its acquisitions in the US will also give it a bigger presence in the market.

Given the IPO ambitions, Kaar Tech’s first and potentially final external round, is meant to be a fuel-up before pressing down on the accelerator.

The post What Made Kaar Tech End Its 17-Year Bootstrapping Streak And Raise $30 Mn From A91 Partners appeared first on Inc42 Media.

San Francisco and Bengaluru-based SaaS management platform Zluri on Thursday (July 13) said it has raised $20 Mn in its Series B round, led by Lightspeed. The funding round also saw participation from existing investors including MassMutual Ventures, Endiya Partners, and Kalaari Capital.

The startup didn’t disclose the valuation at which it raised the funding. 

In a statement, Zluri said it will utilise the fresh capital to expand its Generative AI capabilities in enterprise SaaSOps with its new feature, Zluri CoPilot, an intelligent assistant to boost efficiency and productivity across enterprises using no-code workflows. 

Founded in 2020 by Chaithanya Yambari, Ritish Reddy, and Sethu Meenakshisundaram, Zluri is a cloud-native SaaS operation platform that helps enterprises manage their SaaS applications and identity governance, while mitigating risks. 

Zluri’s comprehensive SaaS operations platform for IT teams helps companies discover, manage and optimise, secure, and automate SaaS applications from a single dashboard. In addition to this, its identity governance tool helps teams streamline on/off boarding, access request management and offer access audits.

The new Zluri CoPilot feature will help teams converse with their data and create workflows to make offboarding users much more efficient.

The startup claims to work with over 250 customers globally, including Monday.com, Tipalti, Whoop, Catapult Sports, Razorpay, Smartnews, Amagi, Daxko, and Traveloka. 

With this round, Zlurri has now raised over $32 Mn in funding across multiple rounds. The startup intends to double down on its biggest markets – Europe and North America, from where it earns over 60% of its total revenue. 

Zluri competes against the likes of Zylo, Torri, BetterCloud, among others. 

While the SaaS sector is one of the brightest sectors in the Indian startup ecosystem, it has also failed to escape from the impact of the ongoing funding winter. As per Inc42’s ‘India Tech Startup Funding Report H1 2023,’ total funding raised by SaaS startups dropped over 78% on a year-on-year basis to $580 Mn from $2.7 Bn in the year-ago period. The deal count stood at 94 in the first half of 2023, a decline of 25% from a year ago. 

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US-based Cilio Technologies has acquired Noida-based end-to-end digital transformation and product development startup AutomationFactory.AI.

With this acquisition, AutomationFactory will become Cilio Automation Factory, Cilio’s global engineering hub with focus on innovation for field service management space, the US-based company said in a statement.

However, it didn’t disclose the financial details of the deal.

According to PTI, AutomationFactory will triple its team to over 120 people in a year post the acquisition.

AutomationFactory, founded in 2020 by Love Chopra and Amit Bana, helps data-driven enterprises digitally transform themselves by providing data engineering, advanced analytics, devops automation, intelligent process automation and artificial intelligence solutions. It provides consulting, information technology solutions and outsourcing services.

On the other hand, Cilio is a SaaS provider that operates in the home improvement space. It provides services to manufacturers, retailers and installers. It counts companies like Caesarstone, IKEA, LG, Lowes Home Improvement among its customers.

Commenting on the acquisition of AutomationFactory, Cilio’s president Rick Olejnik said, “The software engineering capability on this team is top notch and together we have the most powerful R&D organization in the home installation field service management industry.”

The integrated team of the two enterprises will be based out India and will continue to support and expand Cilio’s existing systems integration business and clientele. 

One of the primary objectives of the AutomationFactory team will be to develop solutions for Cilio customers to expand digital transformation consulting, project delivery, and talent augmentation services. It will look to address the requirement of the South Asian home installation market, which is estimated to be worth over $10 Bn and growing 10% annually. 

With rising digitisation, SaaS startups and companies have been receiving a lot of interest from investors. 

Earlier this month, KaarTech raised a funding of $30 Mn from Mumbai-based investment firm A91 Partners to strengthen its presence in the markets of the Middle East, the European Union and North America.

Before that, SaaS startup Togai raised $3.1 Mn in a seed funding round for product development and expansion across new geographies. 

The post Cilio Acquires Noida-Based Digital Transformation Startup AutomationFactory.AI appeared first on Inc42 Media.

B2B cloud manufacturing startup Frigate has raised $1.5 Mn as part of its seed funding round led by Arali Ventures. The round also saw participation from institutional investors such as Capital A, Java Capital, as well as other strategic angel investors. 

The startup will use the capital to further scale up its digital manufacturing ecosystem to cater to clients globally. The funds will also enable Frigate to strengthen its teams in India and globally across multiple verticals.

Founded in 2021 by brothers Tamizhinian Vasanthan and Iniyavan Vasanthan along with Karthikeyan Prakash and Chandrasekar C, Frigate is a B2B cloud platform that offers a suite of manufacturing services to medium and large-scale companies globally. In simple words, it helps businesses turn their digital designs into physical products without worrying about delays or finding vendors.

It caters to clients in areas such as new energy and power, electric vehicles, infrastructure and auto industries. Frigate also claims to have so far served more than 200 MSMEs, and has manufactured more than 1 Lakh parts since its inception. 

The Tiruchirapalli-based startup deploys AI-based tech platform to match demand with supply to streamline the entire process from sales to fulfilment. It claims to partner with 200 manufacturing partners spread across Tier-II cities such as Coimbatore, Hosur and Jamnagar to utilise their spare capacity to cater to the demand.

Commenting on the development, Frigate cofounder and chief executive officer (CEO) Tamizhinian Vasanthan said, “On the demand side, Frigate provides manufacturing-as-a-service to global customers, offering globally competitive pricing, better lead time, and best in class manufacturing with quality… Frigate is helping overseas customers who are looking at China+1 policy to set up a manufacturing base in India.”

The fundraise comes more than a year after the startup raised $185K as part of its pre-seed round in April last year.

Frigate competes with the likes of homegrown players such as unicorn Zetwerk, Nexprt, Groyyo and CapGrid in the burgeoning B2B cloud manufacturing space. 

Per a report, the global cloud manufacturing space is projected to grow to a market size of $206 Bn by 2031. While India numbers are scarce, the country is expected to see renewed interest from companies globally as they look for cheaper and effective alternatives amid the ongoing political row between the US and China. 

The post Frigate Raises Funding To Make Manufacturing Easy For Industrial OEMs appeared first on Inc42 Media.

US-based asset management company (AMC) Fidelity Investments has slashed the valuation of Gupshup once again, trimming the fair value of its holding in the SaaS startup by 8.4% as of May 31, 2023.

Fidelity cut the fair value of its stake in Gupshup to $10.15 Mn as of May 31 from $11 Mn as of April 28, 2023, as per its filings with the US Securities and Exchange Commission.

More importantly, this valuation is 37.4% lower from $16.2 Mn at which Fidelity valued Gupshup while investing in the startup in August 2021.

It is pertinent to note that fair value updates issued by many investors are a regular phenomenon and depend on the investor’s internal policies. Valuation methodologies also vary from investor to investor and slashing of valuation by one investor does not necessarily mean that it would be perceived negatively by other investors. However, it may have a ripple effect.

Founded in 2004 by Beerud Sheth, Gupshup is a conversational messaging platform that helps companies enhance customer experience. It claims to send over 7 Bn messages per month to enable conversations with customers and counts major Indian banks and unicorns as its clients.

The startup last raised $240 Mn in a follow-on funding round in July 2021 which saw participation from Fidelity Management and Research, Tiger Global, Think Investments, Malabar Investments, Harbor Spring Capital, among others.

Gupshup’s total revenue jumped 53% to INR 1,140.7 Cr in the financial year 2021-22 (FY22) from INR 747.6 Cr in the previous fiscal, while its net profit narrowed 24% year-on-year% to INR 39.9 Cr.

Over the last few months, the ongoing funding winter and adverse macroeconomic conditions have resulted in a number of investors cutting the valuations of Indian startups in their portfolios.

The Private Shares Fund cut the fair value of Eruditus by 8.56% in the March quarter, while investment firm Vanguard Group slashed the valuation of ride-hailing unicorn Ola for the third time by 35% to $4.8 Bn in May 2023 from $7.4 Bn .

Meanwhile, there are no signs of the end of the funding winter. According to Inc42’s H1 2023 Startup Funding Report, the funding raised by Indian startups declined 10% to $5.4 Bn in the first half of 2023 (H1 2023) from H2 2022. The number of deals also fell 25% to 462 in H1 2023.

The post Fidelity Cuts Gupshup’s Valuation By Another 8.4% appeared first on Inc42 Media.

Joining the artificial intelligence (AI) bandwagon, Nasdaq-listed enterprise tech giant Freshworks has rolled out a slew of generative AI enhancements to its existing product portfolio. 

On the sidelines of the second annual Freshworks’ Developer Summit 2023 in Bengaluru, the company announced the launch of three new products — Freddy Self Service, Freddy Copilot and Freddy Insights. 

These offerings will deploy OpenAI’s large language models (LLMs) to help automate tasks and derive actionable insights.

“Freshworks’ goal is to have Freddy AI solutions unify the strengths of a range of LLMs to optimise business performance and speed deployments. Freshworks will build out proprietary language models and incorporate general-purpose LLMs to address customer-specific needs,” the company said in a statement. 

Headlining the launches was Freddy Copilot. The AI capabilities aim to offload repetitive tasks and speed up workflows by allowing teams to use conversational prompts to do their jobs within Freshworks products. It also offers contextual assistance for teams across support, sales, marketing and developers, enabling them to build new applications to extend them. 

According to the company, it has already onboarded more than 2,500 developers as part of its Freshworks Developer Platform to enable access to Freddy Copilot to build apps. The SaaS firm has already deployed the beta version of the Copilot product across 390 companies.

On the other hand, Freddy Self Service will leverage LLMs and account-specific models to offer personalised customer and employee support at scale. It deploys bots to handle large queries from employees and customers within Freshworks services and offers personalised responses. This, as per Freshworks, would enable customer support and IT personnel to focus on other projects and offload monotonous tasks to bits. 

The third product, Freddy Insights, deploys generative AI to run through customer and employee support data to identify areas for improvement. It can also analyse marketing and sales data to recommend optimisation strategies to increase revenue. The AI-powered offering can also evaluate support teams to see if they are delivering on set goals and adhering to established guidelines. 

“For far too long companies have spent time and energy training humans to understand software. Now with generative AI, products are learning to adapt to how humans think… Freshworks has a unique opportunity to bring greater productivity and proactive insights to businesses of all sizes and help our customers turn generative AI into business momentum,” said Freshworks’ chief product officer (CPO) Prakash Ramamurthy.

This comes a week after reports surfaced that Freshworks’ competitor Zoho was working on building its own LLM under the supervision of cofounder and CEO Sridhar Vembu. The company has already integrated LLM products such as ChatGPT in as many as 13 of its applications. 

Interestingly, Freshworks CEO and cofounder Girish Mathrubootham previously worked at Zoho and parted ways with the company to start his own venture in 2010. 

The Shaky Boat

The new offerings come even as Freshworks continues to grapple with a slew of issues. For starters, the company has been reporting losses, which stood at $42.66 Mn in the first quarter of 2023. Besides, the company has conducted multiple rounds of layoffs at its India and US offices as part of a restructuring drive to bolster numbers and cut losses. 

The listed SaaS startup also saw the exit of cofounder and chief technology officer (CTO) Shanmugam Krishnasamy in September 2022, and its stock has been on a downward spiral since its record high of $50.25 in October 2021. Currently, the stock hovers around the $16 mark. An impending legal case also adds to the trouble brewing at the company. 

Global inflationary pressures have also hit SaaS spending at major companies, making matters worse for the entire ecosystem. Despite the gloom, the homegrown SaaS market is projected to grow to a market size of $50 Bn by 2030.

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NASDAQ-listed SaaS unicorn Freshworks has reportedly seen another round of layoffs across multiple teams in the US citing performance reviews.

The layoffs have happened within senior positions in the SaaS unicorn’s product, engineering and go-to-market (GTM) teams, sources told Moneycontrol.

Per one source cited by the publication, senior directors, product managers and senior vice presidents were let go during the process. Freshworks’ GTM team includes marketing, strategy and enablement.

Per other sources cited, there were no formal announcements and the employees got to know of the layoffs after people left WhatsApp groups. The number of employees impacted remains unknown.

When Inc42 reached out to the listed SaaS unicorn for clarification, a spokesperson said, “Freshworks does not comment on the management of the workforce in our normal course of business. There have been no organization-wide layoffs to report.”

This is the third round of layoffs at Freshworks within six months after the company fired employees in March 2023 and December 2022 as well. Freshworks had fired around 2% of its staff – around 90 employees – in December.

However, while there were no confirmations from the company on the number of impacted employees during the second layoff round in March 2023, media reports indicated around 114-125 staff being impacted.

Founded in 2010 by Girish Mathrubootham and Shanmugam Krishnasamy, Freshworks employs more than 5,000 employees, while its LinkedIn account shows a workforce of more than 7,500 employees. The company offers a suite of software for customer service and support, customer engagement and IT service management.

The layoffs come months after Freshworks reported an adjusted operating profit for the first time in the January-March quarter of 2023, posting a non-GAAP (Generally Acceptable Accounting Practices) profit of $3.88 Mn during the quarter.

The company’s overall net loss stood at $42.66 Mn in the first quarter of 2023, a decline of over 13% from $49.06 Mn in the year-ago quarter.

Freshworks’ cofounder and CTO Krishnasamy also quit late in 2022 and the SaaS unicorn has yet to appoint a replacement.

The listed SaaS unicorn’s shares closed at $15.67 apiece on Friday (June 9). While the share price is 38.18% higher than at the same time last year, it is down 66.48% compared to its listing price.

Indian startups have fired more than 27,000 employees since the start of 2022, as global macroeconomic headwinds and a funding winter continue to prevail, per Inc42’s ‘Indian Startup Layoff Tracker’.

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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.

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