Norwest, Sequoia Back Indian Cloud-Based CRM Startup

Capillary Technologies, a cloud-based customer engagement solution provider for large enterprises, has raised $15.5 million in a Series A round that was led by Norwest Venture Partners and Sequoia Capital and included exsting investor Qualcomm Ventures. As a result of the financing, Mohan Kumar of Norwest and Shailesh Lakhani of Sequoia have joined the board. The Bangalore, India-based startup is a past winner of the QPrize, a Qualcomm Ventures seed competition, which includes a $100,000 prize. The company was founded in August 2008 and also raised angel funding.

PRESS RELEASE

CAPILLARY TECHNOLOGIES RAISES $15.5 MILLION SERIES A INVESTMENT FROM SEQUOIA CAPITAL AND NORWEST VENTURE PARTNERS

Leader in Cloud-Based Loyalty, Mobile and Social CRM Solutions Expands into U.S. Market to Help Retailers Drive Sales Through Intelligent Customer Engagement

PALO ALTO, CA September 25, 2012 — Capillary Technologies, a leading 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.  The round was led by Norwest Venture Partners and Sequoia Capital and Mohan Kumar of NVP and Shailesh Lakhani of Sequoia have joined Capillary’s board of directors.   Existing investor Qualcomm Ventures also participated in the round.  Capillary will use the capital infusion to bolster its presence in the U.S. market 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 the United Kingdom, India, South East Asia, the Middle East, South Africa and the United States.  Capillary’s customers include industry leaders such as Pizza Hut, Puma, United Colors of Benetton, Mothercare, Robinson’s, Store21, Sunglass Hut and Nike.  These marquee retailers have realized as much as a 10% increase in same-store sales by leveraging Capillary’s solution, which combines frictionless consumer enrollment , back-end analytics and campaign management to drive consumer engagement across every major channel, including in-store, mobile, e-mail, and social. 

“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 into the U.S. market, and take our company to the next level.”  

Capillary’s patent pending cloud platform integrates everything that retail marketers and operators require to engage with their customers, weaving social and mobile experiences into virtually any point of sale device, from legacy terminals to the latest POS devices and mobile tablets.   Capillary’s suite of Intelligent Customer Engagement™ solutions offers real-time, high quality data capture, actionable analytics, instant cross-sell solutions, and instant shopper gratification to generate significant ROI within weeks of implementation. 

“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,” said Promod Haque, managing partner, Norwest Venture Partners.  “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.”

By combining big data with a robust, cloud-based analytics engine, Capillary optimizes the relevance and profitability of discounts and personalized offers to consumers in real time, significantly increasing both loyalty and sales.  A retailer can engage customers while in store via their mobile phones and encourage additional purchases while the customer is still on premise.  Capillary’s platform also allows retailers to integrate social media at the point of sale, giving it a competitive advantage over other companies in the loyalty space. 

“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,” said Shailesh Lakhani, Managing Partner, Sequoia Capital.  “We really liked the strength of Capillary’s solution for retailers and its ability to deliver immediate business results and are happy to partner with the company in this next crucial phase of their growth.”

To expand its presence in the U.S. market, Capillary recently opened offices in Palo Alto, CA and will be building up its sales and marketing team over the coming months. The company also announced today that Silicon Valley veteran Anil Pereira, CEO of Verious and former EVP of VeriSign and VP of American Express, has been named as a strategic advisor to the company.

“North America is the next major market for us and Silicon Valley will serve as our sales, marketing and product development hub as we serve our rapidly-growing customer base,” said Krishna Mehra, co-founder and President, Americas for Capillary.  “Drawing on our experience in other major markets and discussions with a range of U.S. retailers, we know that our cloud-based solution can be implemented very quickly so that customers can reap the rewards of engaging with their customers across a variety of channels.”

About Capillary Technologies, Inc.
Capillary Technologies is a leading provider of cloud-based software solutions that helps retailers to intelligently engage with customers through mobile, social and in-store channels.  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 bringing instant shopper gratification to over 50 million consumers across the United Kingdom, India, South East Asia, the Middle East, South Africa and the United States.  The company is the recipient of numerous awards and was most recently named to the Red Herring Asia Top 100 Companies of 2012.  Capillary is backed by prominent venture capital investors including Sequoia Capital, Norwest Venture Partners and Qualcomm.  

About Sequoia Capital 
Sequoia Capital in India currently manages funds capitalized at close to US $1.4 billion and invests across venture, growth and late stage opportunities. It takes a long term view on investments and plays the role of an active, value added partner to entrepreneurs, business families and management teams. Over the last 6 years, Sequoia Capital has invested in more than 60 Indian companies including Café Coffee Day, Druva, Idea Cellular, Just Dial, Mu Sigma, Paras Pharma, Prizm Payments, Quickheal and Vasan Eye Care.  Sequoia Capital in India operates out of offices in Bangalore, Mumbai and New Delhi.

Globally, Sequoia Capital has an unparalleled track record of partnering with entrepreneurs to create global market leaders. Sequoia Capital has been an early investor incompanies such as Google, Cisco, Yahoo, YouTube, Oracle, Linkedin, Dropbox and Apple Computers. Sequoia Capital maintains dedicated teams in the US, China, India and Israel.

To learn more about Sequoia Capital visit: www.sequoiacap.com/india 

About Norwest Venture Partners (NVP)
Norwest Venture Partners (NVP) is a multi-stage investment firm that has partnered with entrepreneurs to build great businesses for more than 50 years. The firm manages more than $3.7 billion in capital and has funded over 500 companies since inception.  Headquartered in Palo Alto, California, NVP has subsidiaries in Mumbai and Bengaluru, India and Herzelia, Israel and Hong Kong. NVP makes early to late stage venture and growth equity investments across a wide range of sectors including: information technology, business services, financial services, infrastructure, technology enabled services and consumer. For more information visit: www.nvp.com.