Capillary Tech raises $14 mln in funding as IT startup interest grows

REUTERS - Software services provider startup Capillary Technologies Pvt Ltd said on Thursday it has raised $14 million in a fresh round of funding led by existing investors Sequoia Capital Partners Inc and Norwest Venture Partners.

Bangalore-based Capillary Tech sells services designed to help retailers manage customer data and online presence. It counts British retailer Marks and Spencer Group PLC, Yum! Brands Inc's KFC restaurant chain and French clothing brand Lacoste among customers.

The fresh round of funding, which comes on top of $17 million received in 2012, will be used to improve Capillary Tech's marketing and partnership platforms, the company said.

The funding comes amid growing interest in India's startups, offering niche technology products or services that traditional outsourcing companies don't offer, or can't offer at competitive rates. A large number of funds, including the likes of U.S.-based Accel Partners & Co, Lightspeed Venture Partners and Sequoia Capital, are chasing investment opportunities.

Venture capital funds invested around $190 million in early-stage tech firms in India last year, up by almost a quarter from 2012, according to Hong Kong-based Centre for Asia Private Equity Research Ltd.

(Reporting by Nivedita Bhattacharjee in MUMBAI; Editing by Kenneth Maxwell)