Capillary Technologies raises $20 million from Warburg Pincus, others2 min read . Updated: 22 Feb 2018, 02:54 AM IST
Capillary Technologies will use the funding from Warburg Pincus and others for product development, especially around Artificial Intelligence and machine learning
Bengaluru: Enterprise software company Capillary Technologies Pvt. Ltd has raised $20 million in a new round of funding from private equity firm Warburg Pincus, venture capital firm Sequoia Capital and existing investors, the company said in a statement on Wednesday.
Capillary offers cloud Software as a Solution (SaaS) to retail and consumer goods companies in India and abroad. It will use the fresh round of funding to strengthen product development capabilities, especially around artificial intelligence (AI) and machine learning.
The company will also invest money to build software for potential customers under its newly launched consumer products and goods (CPG) vertical. Under the CPG vertical, Capillary provides software for automating promotional campaigns, and a full stack of e-commerce software solutions for consumer brands.
Aneesh Reddy, chief executive officer, Capillary Technologies, said in a statement that more than 70% of these funds would be used to fund research and development around AI and to expand presence in overseas markets.
“We’re also looking to further strengthen our presence in China and the Middle East, besides penetrating further into Southeast Asia. We will soon be opening our second office in China at Guangzhou and then another at Beijing later this year. Going beyond retail, we are expanding into adjacent industry, consumer goods (FMCG), which has a close affinity to retail," said Reddy.
Reddy added that the company is also building new solutions for brick-and-mortar stores using AI. He said that offline stores don’t really have any basic analytics data that they could use to optimize their business, so the company is helping build solutions to estimate metrics like conversion rates, store walk-ins and others.
“Using Capillary’s software, offline stores can understand not only how many customers they are getting, but also how many customers walked out due to non-availability of goods. The solution will also keep a record of customers asking for discounts with which stores can offer discount offers in the future," added Reddy.
In the retail vertical, in which the company started off, brands in apparel and fashion segment provide the largest business in terms of revenue, according to Reddy. Restaurant and food brands are the second biggest revenue generators for Capillary in the retail segment.
As of now, Capillary’s solutions have been used by more than 300 brands across 25,000 stores in over 30 countries, including big brands like PizzaHut, Walmart, Al-Futtaim, KFC and Starbucks. It also has seven office branches across the globe.
Commenting on the investment, Vikram Chogle, principal, Warburg Pincus, said, “There were two key elements of the opportunity that caught our attention at the time of Warburg Pincus’ first investment in Capillary—the ability to back a talented and passionate entrepreneur in Aneesh, and the core Capillary product’s capacity to deliver a superior value proposition to a customer base with an unmet need. Since Warburg Pincus’ initial investment, Capillary has established a clear leadership position in the market and emerged as a preferred partner for brands and retailers throughout the region. We are pleased to continue to be a part of the company’s journey as the team further scales the business."
Till date, Capillary has raised more than $100 million in funding, including the current round. Its previous investors include venture capital firms like InnoVen Capital, Norwest Venture Partners and American Express Ventures.
In 2017, B2B startups raised more than $200 million in funding from various investors, which is the highest since 2010, according to startup tracker Traxcn. The biggest rounds last year include a $100 million deal closed by Just Buy Live, Power2sme’s $35 million Series E round and Moglix’s $12 million round.