Bengaluru: Just over a decade after it started out as Solutions Infini, SMS promotion services provider Kaleyra is close to a listing on the New York Stock Exchange (NYSE), with a target to raise up to $192 million.
In 2008, Aniketh Jain and Ashish Agarwal put ₹8 lakh into their startup Solutions Infini, which helped offline sellers and businesses to keep in touch with customers via SMS advertisements and promotions. The two opened their first office in Bengaluru’s startup hub of Koramangala.
The company, since rebranded as Kaleyra S.p.A., is now headquartered in Milan, with offices in Bengaluru and Washington DC.
In June 2018, the company merged with Italian-based cloud messaging platform Ubiquity, which was looking for an investment in India.
Jain and Agarwal met Ubiquity’s founders for the first time in Barcelona in 2016, during the Mobile World Congress (MWC).
This was also the time several business-to-business (B2B) startups such as Unicel, Variform and Exotel sprang up in Bengaluru, selling bulk SMS and voice ads to small businesses and enterprises looking to push out retail ads via SMS and automated calls to customers.
Several B2B startups— including those mentioned above—that came up in India around the same time as the consumer Internet boom, couldn’t garner interest from top consumer venture capitalists in India, and most of them remained bootstrapped.
Similar to Solutions Infini, its competitor Exotel, a cloud telephony startup, had only raised one round of seed funding worth $705,000 in 2012.
“We approached investors in 2013 and 2014, since a lot of startups were raising money. We went to some investment bankers, filled in some forms, but we found it difficult to educate most investors on our product," Agarwal told Mint.
But in Barcelona in 2016, Ubiquity and Solutions Infini came to a common ground: both wanted to take the initial public offering route to raise growth capital, and while each had different reasons for it, their merger in June 2018 paved the way to a public listing.
Kaleyra is going public through a tie-up with Palo Alto-based Gig Capital, a special purpose acquisition corporation (SPAC) that publicly trades on the NYSE, and allows other firms to raise capital via its unit.
The company is currently in the process of finalizing its S1 filing—a US requirement—and investor road shows across the US, and plans to start public trading under its ticker symbol “KLR" by September, according to Jain and Agarwal.
“Kaleyra’s listing on the NYSE through a blank cheque company is a very positive move. It has shown the path to exit for cPaaS (cloud platform as a service) companies. cPaaS companies like Solutions Infiniti (which was acquired by Ubiquity of Italy and the joint entity rebranded as Kaleyra) are profitable and provide critical solution to the fast growing new age businesses which use their APIs (application program interfaces) to communicate with their ecosystem. At 1.5x the revenue, their (Kaleyra’s) valuation has upsides which the listed stock will expectedly achieve in the near future," said Sumir Verma, founder and managing director, Merisis Advisors.
Italy’s Ubiquity had originally picked up a controlling stake in Solutions Infini back in 2016, after making an undisclosed investment into the Bengaluru-based company, according to an Economic Times report.
Ubiquity further raised its stake in the company to around 70% in 2018, just before the rebranding.
Jain and Agarwal currently hold minor stakes in Kaleyra. Jain had assumed the role of general manager (global enterprise business) at Kaleyra after the merger in 2018, while Agarwal is chief technology officer.
Kaleyra offers a full-stack cloud communication solution to enterprises including voice support, SMS marketing, chatbots for after-sales service, OTP (one-time password) authentication, among others.
It also counts unicorns like ride hailing firm Uber Technologies Inc., food delivery startup Swiggy, and e-commerce firms Flipkart Pvt. Ltd and Myntra among others as clients.
Till date, the company has processed over 24 billion notifications, one billion voice calls, and clocked around $100 million in revenue in 2018.