Software Startup Capillary Tech To Raise $30 Mn in Fresh Funding

Capillary Technologies, one of India's few blue-eyed startups launched along with Flipkart in 2008, is on verge of raising a fresh round of funding, estimated at around $30 million, reported Economic Times.

The funding round is expected to take place in February.

The report further stated that the funding will primarily be secondary in nature, with just a third of the funds raised expected to come into Capillary as primary capital.

'Primary' means a direct investment in a company, for e.g - the VC gives a company money, and in exchange the company issues new shares for the VC. These new shares dilute the existing shareholders. While, 'Secondary' typically means buying existing shares from existing investors.

The fresh funding is expected to be led by its existing investor, marquee private equity firm, Warburg Pincus, and is likely to have a large secondary component.

Headquartered in Singapore & Bengaluru, Capillary last raised $45 Million from Warburg Pincus, Sequoia Capital and Norwest Venture Partners, in September 2015. In total, excluding the upcoming funding, Capillary has raised $90 million.

Capillary is expected to use the proceeds from upcoming funding to expand its footprints, particularly in China, where it has already put a team in place, in July 2016. Additionally, it will also be building artificial intelligence products focused on offline retail, according to the sources of ET.

Founded in 2008 by Aneesh Reddy, Krishna Mehra and Ajay Modani, (the later two having left the company about 3 years ago), Capillary Technologies was incubated in Indian Institute of Technology, Kharagpur (IIT-KGP) and despite not being heavily funded like Flipkart, the company is one of few respected startups in not just India but globally too.

In June 2013 Harvard Business Review used Capillary as a Case for reverse Innovation in Tech Startups. In December 2016, Google's Vice President for South East Asia and India, Rajan Anandan joined Capillary as a Board member.

Moreover, in last couple of years, Capillary has made few important acquisitions as well. In September 2015, Capillary acquired an eCommerce software platform MartJack as one of the biggest acquisitions of 2015 and in October 2016, Capillary acquired SellerWorx, an eCommerce services and technology company.

Capillary Leads Pre-Series A Funding in Online-to-Offline Fashion Store Discovery & Loyalty App, Fashalot

Capillary Technologies, homegrown omni-channel and customer engagement platform, has led a pre-Series A funding round in online-to-offline fashion store discovery & loyalty app, Fashalot. Fashalot’s focus on driving footfalls at retail stores ties into Capillary’s push for creating solutions that improve retail store engagement with their customers. The investment was also driven by the fact that Fashalot is a pioneer in this high-potential industry, with a highly experienced team and deep expertise in advanced location-based technology and rich data that powers a new generation of consumer analytics highly contextual consumer marketing.

Fashalot is the leading online-to-offline mobile app platform enabling retailers with first ever features like Non-Shopper Feedback, Geo-fenced personalized communication to shoppers, cross brand loyalty, shoppers’ wardrobe mapping to name a few. It facilitate communication between retailers and shoppers to discover in-store sales, deals, offers, and discounts on the latest collections. Currently live in Delhi NCR & Bangalore, over 5,000 plus marquee fashion stores are using Fashalot to drive new and incremental footfalls, enhance discovery, customers’ shopping experience and high conversions. Fashalot has saved its customers over INR 5 crore till date and is generating 25 app sessions every month. It has been able to show such results by providing highly personalized exclusive communication to shoppers as per their preferences, shopping pattern, location, and much more. It also awards reward points called as F-Cash to shoppers for walk-ins, shopping, reviews etc. into nearby partner stores.

Speaking on their new investment, Aneesh Reddy, Co- Founder & CEO, Capillary Technologies, commented, “As a company dedicated to providing solutions for retail store marketing and branding, we are pleased to have invested into Fashalot. We believe in Fashalot’s future of replacing traditional modes of marketing such as print and media. The fashion retail industry in India is pegged at USD 100+ billion, in which 98% of sales happen offline. USD 3 billion a year is spent on various marketing channels and Fashalot’s use of rich data customer analytics by capturing shopper’s intent to shop could help capture a substantial part of this market.”

Speaking on the new funding, Amit Koshal, Co-Founder & CEO of Fashalot, commented, “We are excited to close on this latest round of funding led by Capillary Technologies with participation from Whiteboard Capital, a fund started by Sandeep Tandon – the Free charge Co-Founder – and appreciate the continued support from YourNest and Rajul Garg. We will mainly be using these funds to build even stronger technology, scale our user-base, and hire great new talent. Our focus will be on greater penetration in the Delhi-NCR and Bangalore markets by on-boarding more brands and new innovations in the app for a superior customer shopping experience. ”

Speaking on their participation, Girish Shivani, Executive Director and Fund Manager - YourNest, commented, “We have seen commendable execution by Fashalot’s team to not only commercially on-board large number of brands in no time but also their exceptional success in key business metrics. We see Fashalot’s users engage and stick to the offline brands at a very high frequency, making it part of their lives”.

Fashion is predominantly offline and Fashalot is the first platform that helps shoppers save at their favorite brands with its gamified cross loyalty rewards, explore in-store offers, and be made aware of new collections near them. This replaces traditional modes of marketing such as print and media for the consumption of this content.

Organized retail in India constitutes over USD 46 billion of the total market and does over 200 million transactions every month. Fashalot aims to move over 1 million transactions a month through its app using rich data to create a new generation of consumer analytics. Fashalot is currently live in 2 cities – Delhi NCR and Bangalore – and has already reached up to 5% of a store’s sales in some cases. It has started to move towards deep personalization for shoppers with content and preferences, which in turn influences their shopping choices and wardrobe.