Capillary Technologies to raise $15 million

Existing investors including Norwest Venture Partners, Qualcomm Ventures, Sequoia Capital, American Express Ventures to participate in this round

Bangalore-based cloud software services provider Capillary Technologies is in the process of raising around $15 million (about Rs 90 crore) from its existing investors — Norwest Venture Partners, Qualcomm Ventures, Sequoia Capital, and American Express Ventures, the corporate venture arm of American Express.

The fund-raising is likely to be completed by mid-July, after which the company will make an announcement, sources said. “Several new investors had shown interest to invest in the company and the management received term-sheets from others. But they have good relationship with the existing investors and so they decided to stick to them,” said a Capillary Technologies officials, who did not wish to be named. “American Express Ventures had entered into a strategic partnership with Capillary Technologies a few months ago. So, in that sense, they are not a new investor.” In 2012, Capillary Technologies had raised $15.5 million from Norwest Venture Partners, Qualcomm Ventures and Sequoia Capital. In February this year, American Express Ventures made a strategic investment in Capillary Technologies, which was reportedly of $4 million. This was American Express Ventures’ maiden investment in India.

Capillary Technologies refused to comment on the development. “We would not want to comment on this at this point in time,” said Aneesh Reddy, co-founder and CEO of the company.

Earlier this year, Reddy had told Business Standard that the firm was not looking at raising more funds. “Currently, we are self-sufficient and don’t need money. With the $20 million raised so far, we are quite well-placed. This is a high-margin business (accounting for about 65 per cent of the gross margins) and our churn is sub-10 per cent, which makes us quite comfortable. We will look at series-B funding in early to mid-2015,” he had said.

The Series B funding will be used for global expansion, as Capillary Technologies has been looking to expand its footprint into newer geographies over the past one year, sources said.

Capillary Technologies provides customer relationship management (CRM) solutions to retailers and has presence across India, Singapore, Malaysia, Greater China, UK, South Africa, the US, Dubai, Australia and New Zealand.

According to the company's website, its clients include retail giants such as Marks & Spencer, Nike, Puma, Raymond, Peter England and Lifestyle, along with food chains like Pizza Hut and Faaso's.

“The investors will get a smaller stake than what they had at the time of Series A funding,” the source said. The quantum of the stake was, however, not confirmed.