Capillary Technologies Raises $15.5 Million in Series A from Sequoia Capital and Norwest Venture Partners

Capillary Technologies, a provider of cloud-based software solutions that helps retailers to intelligently engage with customers through mobile, social and in-store channels, today announced that it has closed a $15.5 million Series A round of venture financing led by Sequoia Capital and Norwest Venture Partners (NVP).  Existing investor Qualcomm Ventures also participated in the round.  Mohan Kumar of NVP and Shailesh Lakhani of Sequoia have joined Capillary’s board of directors.  Capillary will use the capital infusion to further penetrate the billion dollar small retailer market in the country, extend its offerings to retail-akin industries like healthcare and hospitality, and enhance its product portfolio to meet the needs of a broad range of retailers worldwide.

Capillary’s cloud-based platform powers end-to-end customer engagement, clienteling, loyalty and social CRM solutions for more than 100 major brands across 10,000 stores—serving over 50 million consumers—in India, South East Asia, Greater China, Middle East, South Africa, United Kingdom and the United States.  Their marquee retailers like Pizza Hut, Puma, Raymond and UCB have realized as much as a 10% increase in same-store sales by leveraging Capillary’s solution.

Aneesh Reddy and Krishna Mehra

“We see an enormous global market for our solutions.  This funding round validates our vision of enabling retailers to harness the power of the cloud, predictive analytics and new mobile and social channels to drive sales and profits through customer engagement,” said Aneesh Reddy, co-founder and CEO of Capillary Technologies.  “Both Sequoia and Norwest have amazing track records in helping to build significant companies—particularly in the big data and analytics sectors.  We’re looking forward to working with both firms as we invest further in our team and platform, expand aggressively into the Indian market, and take our company to the next level.”  

In an exclusive chat, co-founder Krishna Mehra told us more.

Having served across so many countries, what are your plans for India? What is Capillary’s focus going to be?

We continue to build and scale up in India. We have had significant customer wins in India over the last few months, and are also growing our Small business initiative. We already have hundreds of smaller retailers (1-5 stores) using our TruTouch product and finding a lot of value in it. It’s serviced through a channel network, and we are continuing to scale it up.

Besides, India is our hub for all of the company – including product development, analytics as well as global sales and account management. We are building out further so we can support the global expansion seamlessly.

As an entrepreneur, what keeps you going? What is your drive? 

We are very excited to be building one of the most promising global product companies from India, and its the vision of enabling global retailers with Intelligent Customer Engagement, that keeps driving us, to make our products better, to make our service delivery above par, and to make sure we are able to communicate our proposition successfully.

Entrepreneurship is an addiction now! You’re thinking of it all waking hours, and when you’re on a holiday, you get withdrawal symptoms from work. I don’t think I can imagine life otherwise any more.

Over the past 4 years, Capillary has captured over 60% of the organized retail sector to become the largest Retail CRM provider in India. “There’s a Capillary customer in every high-rise and shopping complex in the country. We have witnessed one of the largest Series A funding for a technology product company in India and that validates that we are on the right track,” said Ajay Modani, Co-founder and Vice-President Operations at Capillary.  Capillary has changed the way conventional retailers look at data driven marketing.  “With Capillary, our customers take strategic business decisions intelligently and drive an effective engagement with their customers for incremental profitability and superior competitive advantage”

What do the Investors have to say?

Shailesh Lakhani of Sequoia Capital said:

“Capillary has demonstrated that it can scale up successfully and profitably by focusing on a segment that has been underserved by other more expensive and complex solutions. We really like the strength of Capillary’s solution for retailers and its ability to deliver immediate business results. We are happy to partner with the company in this next crucial phase of its growth.”

Promod Haque of Norwest Venture Partners said:

“We have been extremely impressed with the significant number of customers that Capillary has signed up in a relatively short period of time.  Capillary’s ability to marry ‘social’, ‘local’ and ‘mobile’ with robust behind-the scenes analytics is delivering tremendous value to a wide range of retailers across a number of categories. Capillary is helping these customers drive dramatic same-store sales increases—in some cases close to 10%—and has an enormous opportunity to expand its offerings globally in what is still a hugely untapped market.”