Capillary's valuation after its third round of institutional fundraising is estimated to be $170-180 million (Rs 1,080-Rs 1,140 crore).
Capillary Technologies, a seven-year-old software maker, is in advanced talks to raise about $45 million (Rs 285 crore) in funding led by private equity firm Warburg Pincus, according to three people familiar with the development. "It is quite a large round that Warburg is leading," one of them said, asking not to be named. Capillary's valuation after its third round of institutional fundraising is estimated to be $170-180 million (Rs 1,080-Rs 1,140 crore), a second person said. Capillary Technologies did not reply to an email from ET and CEO Aneesh Reddy declined to comment.
A Warburg Pincus spokesperson also declined to comment. Large investments this year have been primarily focused on consumer internet segments like etailing and online-to-offline businesses, and sectors like software have mostly lagged, with the exception of Freshdesk ($50 million), Manthan ($60 million) and now Capillary. Capillary has so far raised Rs 180 crore from investors including Sequoia Capital India, Norwest Venture Partners, Qualcomm Ventures and American Express Ventures. The firm's previous fund-raising round in July 2014 valued it at around Rs 600 crore.
Founded by IIT-Kharagpur graduates Aneesh Reddy, Krishna Mehra and Ajay Modani Capillary counts VLCC, Puma and Pizza Hut among its clients. As retailers increasingly look to build a seamless experience for buyers across stores, websites and mobile phones, they turn to technology providers like Capillary for solutions that can engage customers both online and offline. Capillary also provides a point-ofsale tablet solution for staff at stores to capture customer visits, social media interaction and transactions, and personalise offerings to buyers. Puma's targeted campaigns brought back at least 80% dormant customers to its stores, and Pizza Hut generated more than $2 million in incremental sales in 18 months using Capillary's target marketing. Initially incubated at their alma mater, Capillary began operations in Kolkata before it moved to Bengaluru in May 2009. While solutions for customer relationship management and data analytics have always existed for retailers, Capillary merges the two on a single platform. Forrester Research predicts retailers will increasingly look to leverage insights from such technology to improve customer experiences.
"We predict that companies will use insights from CRM data to acquire more profitable customers through better targeting, to reduce the cost of acquisition in the early stages of the relationship, to cross-sell and upsell to the right customers, and to increase wallet share through loyalty, retention, and recovery programs," wrote Kate Leggett, an analyst at Forrester Research, in a recent blog post.
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