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Kaleyra co-founders Ashish Agarwal (left) and Aniketh Jain . The firm is already in the final lap of its public listing on the NYSE.
Kaleyra co-founders Ashish Agarwal (left) and Aniketh Jain . The firm is already in the final lap of its public listing on the NYSE.

Kaleyra: The road to IPO for an enterprise software startup

  • Public listings are rare for Indian startups, but vital for the ecosystem. Here’s what it took for Kaleyra to find an exit
  • They started doing rounds of colleges to sell the management system they had built

BENGALURU : Hyper growth and dizzying valuations keep our attention on consumer-facing Indian startups like Ola and Paytm, Swiggy and Oyo, even as they continue to rack up huge losses in their push to capture the market. On the other side of the Moon, so to speak, are enterprise software makers fighting their way to profitability and even an IPO (initial public offering).

Data protection software maker Druva and business software startup Freshworks are unicorns eyeing IPOs in the next couple of years. But a lesser-known company, Kaleyra, is already in the final lap of its public listing on the NYSE (New York Stock Exchange). This will be the culmination of a startup journey that began 11 years ago as a college project and faced seemingly insurmountable hurdles at different stages.

Aniketh Jain and Ashish Agarwal were doing a BCA (Bachelor of Computer Applications) course at Jain College in Bengaluru when they worked together on a college management system as their final semester project. One piece of the system was a GSM modem enabling SMS notifications to parents on things like attendance.

They finished college in the middle of the 2008 global recession. Agarwal wanted to study abroad while Jain was negotiating an offer from an MNC, but progress was slow on both fronts. That triggered a desire to “do something on our own, because even in college we were different; we built a new thing instead of copying one of our seniors’ projects," recollects Jain.


They started doing rounds of colleges to sell the management system they had built. Soon they segued to services for e-commerce companies that were sprouting following the launch of Flipkart. But getting paid to build e-commerce services turned out to be a long-drawn-out affair. Then they built a separate product enabling clients to send SMS notifications to customers. This became the main business of their startup, which was called Solutions Infini back then in 2010. Jain and Agarwal had little inkling that SMS would mushroom to a $500 million business with 22 billion messages a month currently, according to industry data. Notifications, promotions, OTP transaction confirmations—the uses have grown.

Now Kaleyra is also integrated with WhatsApp Business API to include chats for its 3,000 clients, which include Flipkart and Amazon, Swiggy and Ola. It had already added voice and video to its offering, which makes it an omnichannel cloud communication platform today.

“It’s not just the basic telecom service, but all the technology built on top of it that provides value to us," says Vivek Gupta, co-founder of meat and seafood portal Licious, an early adopter of Kaleyra.

One of the add-ons Gupta mentions is number masking, which uses a bridge number on the cloud to prevent a delivery person from accessing a customer’s phone number directly. This is the same feature which enables drivers and riders to mask their numbers from one another in Ola.


Understanding clients like Licious set Kaleyra apart from others in this space, says Jain. Old bulk SMS players concentrated on banks, whereas Solutions Infini and then Kaleyra had an early insight into the scale and needs of new-age businesses because it had started out as a provider of e-commerce services.

Second, well-funded startups like Knowlarity, which started their journey around the same time in 2009, were focused on cloud telephony services like outbound calls and click-to-call for small and medium businesses. Solutions Infini began with SMS and added voice in tandem with the growing needs of emerging businesses. “We had to diversify and that gave us better momentum than those guys (cloud telephony companies)," says Jain.

Before that, however, Solutions Infini had to clear a make-or-break hurdle in 2011. Until then, it relied on third parties for telecom connectivity, because it was hard for a fledgling startup to get a pipe from an operator. Luckily, it was a transition phase between privatization and consolidation when the country had a plethora of telecom operators. One of them was Mumbai-based Loop Mobile, which later got acquired by Bharti Airtel.


Landing a deal with Loop allowed Solutions Infini to improve its margins and expand, but it was a big risk for the bootstrapped venture which had to make a substantial upfront payment and implement various compliance requirements. “It took a lot of convincing that we could execute our plans with new technology, but finally they gave us the connectivity," recalls Jain.

Those were the early days of the startup scene in India when new ventures did not have as many takers as today. Solutions Infini faced rejection not only from operators, before Loop, but also investors. “They felt this market wasn’t conducive for the kind of hockey-stick growth that VCs wanted," says Jain.

But the rejections only pushed the young entrepreneurs to go after profitability. It has been a road strew with obstacles, not the least of which is the peculiar Indian environment where different operators are licensed to serve different circles. This forces a startup to begin from scratch in its integration with an operator and work through compliance circle by circle. Solutions Infini found a way through this maze.


As the business grew, an IPO became the logical route to the next level. But Solutions Infini was still too small for it. Then a door opened at the Mobile World Congress in 2016 where Solutions Infini found common ground with a larger Italian startup Ubiquity that was serving banks with a similar product. The two companies merged to form Kaleyra. With annual revenue of $126 million and a global customer base of 3,000, the combined entity was ready to go public.

To hasten the process, Kaleyra is in turn combining with GigCapital, which is a special purpose acquisition company (SPAC) already listed on NYSE. A SPAC’s share capital is used to acquire firms which then raise money through its units. “The traditional route to IPO would have taken two years. This reverse merger with GigCapital shortened that to six months. The faster we get money, the quicker we get to building a larger business," explains Jain.

IPOs are rare for Indian tech startups, but they’re vital for the ecosystem because they encourage fresh investments. Already, after the merger with Ubiquity, rumoured to be a $40 million exit, Jain and Agarwal have set aside $1 million to invest in upcoming entrepreneurs, especially in domains they know well.

For now, Jain has taken charge of global enterprise business development for Kaleyra. What next for the entrepreneur in him? Perhaps a B2C (business-to-consumer) startup, he quips, with a tinge of envy over the rocketing valuations of consumer internet unicorns.

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