Exclusive: Capillary Technologies Gets Board Nod For INR 2,250 Cr IPO

SaaS startup Capillary Technologies has received approval from its board to raise INR 2,250 Cr (around $263 Mn) through an initial public offering (IPO). 

The Warburg Pincus-backed company plans to raise INR 500 Cr through issuance of fresh shares while it will have an offer for sale (OFS) component of INR 1,750 Cr where some of its shareholders will dilute their holdings, as per regulatory filings accessed by Inc42.

The board of Capillary Technologies approved the proposal to raise the aforesaid funds via an IPO on May 23. However, the decision is subject to approval from shareholders of the company.

Inc42 had reported in January that Capillary Technologies was planning to file its draft red herring prospectus (DRHP) with markets regulator SEBI by June to raise $200 Mn via its IPO. At the time, sources told us that the Bengaluru-based company was eyeing a valuation of $500 Mn to $1 Bn for its listing. The exact timeline for its mainboard listing could not be ascertained.

In its latest regulatory disclosure, the company stated that it may also consider raising additional funds in a pre-IPO round. 

Founded in 2008 by Aneesh Reddy, Ajay Modani and Krishna Mehra, Capillary Technologies provides customer engagement and loyalty software. Its clients include Tata Group, Aditya Birla Group, Domino’s, Indigo, among others. 

While Modani and Mehra have since parted ways with the company, Reddy remains the top boss.

Besides India, Capillary also claims to have a presence in international markets such as Southeast Asia, MENA and the US. 

Last year, it closed its Series D round at $140 Mn. Of this, around $95 Mn comprised secondary transactions, giving partial exits to existing investors and former employees, and making way for new investors to join the cap table. 

Capillary is backed by marquee names like Qualcomm Ventures, Norwest Venture Partners, Avataar Ventures, Filter Capital, InnoVen Capital, Peak XV Partners, American Express Ventures, among others.

This is not Capillary’s first attempt at an India listing. The SaaS startup initially filed DRHP for INR 850 Cr IPO in 2021 but later shelved the plans as markets turned choppy and volatile.

While the company is yet to disclose its FY25 numbers, it saw its operating revenue swell by 80% year-on-year to INR 600 Cr in FY24, while its net loss narrowed 33% YoY to INR 59 Cr, as per filings sourced from Tofler.

Capillary has revived its IPO plans at a time when more than 20 new-age tech companies are preparing to go public in 2025 amid strong investor demand. These include Shiprocket, PhysicsWallah, Groww and boAt — all of which have filed confidential IPO papers with SEBI over the past few months.

The likes of Urban Company, BlueStone, Avanse Financial Services, Smartworks, IndiQube and ArisInfra are also expected to make their public listing in the next six months.

Besides, the likes of PhonePe, Razorpay, Pine Labs, Lenskart and OfBusiness are also ramping up preparations for their potential IPOs.