Knowlarity Communications in talks to raise up to $40 million

Cloud telephony service provider, Knowlarity Communications, seeks funds from Mayfield, Sequoia for acquisitions and to grow overseas markets

The last fund-raising at Knowlarity Communications happened in July 2014, when it raised $16 million from Sequoia and Mayfield Advisors.
The last fund-raising at Knowlarity Communications happened in July 2014, when it raised $16 million from Sequoia and Mayfield Advisors.

Mumbai: Sequoia Capital-backed cloud telephony services provider Knowlarity Communications Pvt. Ltd is in talks to raise as much as $40 million (approximately Rs.270 crore), according to two people aware of the development.

Knowlarity is a provider of cloud communications in emerging markets and offers products such as interactive voice response (IVR), fax and conferencing facilities for small and medium enterprises (SME), enterprise customers and individuals. “They have been in the market for a while now and are in talks with various investment firms for their largest round of fund-raising till date. They are looking at raising up to $40 million in this round,” said one of the two people cited above, requesting anonymity, as the talks are private.

One of the investors they have held talks with is Sapphire Ventures, the venture capital arm of German enterprise software giant SAP SE, he said. “A large part of the new round will be funded by its existing investors Sequoia and Mayfield,” he added.

The last fund-raising at Knowlarity happened in July 2014, when it raised $16 million from Sequoia and Mayfield Advisors.

In 2012, Knowlarity had raised around Rs.34 crore from Sequoia.

Sequoia and Mayfield’s plan to fund Knowlarity’s new round comes at a time when investors have stepped up investments in their portfolio companies, and when the overall funding environment has become relatively tough for Internet start-ups.

Sequoia itself has led several new rounds in its portfolio firms such as education technology start-up Byju’s, where it led a $75 million round in March. Belgian investment firm Sofina also participated in the round. In July, it led a $12.25 million series B round in portfolio firm SirionLabs, a start-up that provides supplier management technology products.

Early-stage investor Accel Partners, too, has been investing in several up rounds of its portfolio firms.

Funds will be used to push the company’s growth in the overseas markets, said the second person cited above, also requesting anonymity. “A bulk of their business comes from Indian firms, but it is a competitive market, with small ticket sizes and also there are regulatory challenges. They have been pushing for expanding business overseas in markets such as Asia-Pacific and West Asia. Earlier this year, they expanded their services to the Middle East market, and they are also working on deepening their presence in other markets,” he said.

Knowlarity will also look at some small acquisitions to beef up their technology, he added.

In January 2014, Knowlarity acquired Unicom Techlabs, a start-up in the same sector. Unicom had more than 200 customers at the time of the acquisition.

Based in Singapore, the company has offices in Gurgaon, Mumbai and Bengaluru, serving over 12,000 SME clients and around 500 large enterprises in more than 65 countries, according to its website.

Some of its large clients include Hindustan Unilever Ltd’s cosmetics brand Lakme, Mahindra Holidays and Twitter.

Knowlarity was founded by IIT Kanpur alumnus Ambarish Gupta in 2009. Prior to founding Knowlarity, Gupta was associated with companies such Microsoft and McKinsey and Co.

In an interview with The Economic Times in June 2015, Gupta said the company was targeting $100 million in revenue in the next three years.

Sequoia Capital declined to comment on the development. Emails sent to Mayfield and Sapphire Ventures went unanswered. “We are not raising any round,” said Ambarish Gupta, founder and chief executive of Knowlarity, in an emailed response.

The company’s flagship communications products are called SuperReceptionist and Smart IVR.

SuperReceptionist is a cloud-based communications service that serves as a virtual assistant, front-office receptionist, lead manager and a customer relationship management system. The company claims SuperReceptionist can process over a million calls in an hour.

The other product, SmartIVR, gives small businesses a professional outlook, by letting a company create multiple departments within their operations, with IVR providing an automated operator with several operations.

Other start-ups operating in the cloud telephony space include Ozonetel, Exotel and VoiceTree.

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