Capillary Technologies board approves Rs 2,250 crore IPO

Capillary Technologies has secured board approval to launch a long-anticipated public offering of Rs 2,250 crore (~$263 million), marking a potential milestone for India’s enterprise SaaS sector.

The Bengaluru-based company, which delivers AI-powered customer engagement and loyalty solutions, is expected to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) by June 2025, aiming for a listing by the end of H1 FY25.

The public issue will comprise a fresh issuance of shares worth Rs 500 crore and an offer for sale (OFS) of Rs 1,750 crore, offering a partial exit to long-term backers such as Warburg Pincus, Peak XV Partners, American Express Ventures, and others. The offering comes nearly three years after Capillary shelved a previous IPO attempt in 2021 due to unfavorable market conditions.

Founded in 2008 by IIT Kharagpur alumni Aneesh Reddy, Ajay Modani, and Krishna Mehra, Capillary Technologies has expanded into more than 30 countries and supports over 120 loyalty programs. Its clientele includes Tata Group, Domino’s, Shell, Puma, Marks & Spencer, Indigo, and Al-Futtaim, underlining its deep integration into enterprise ecosystems across Asia, the Middle East, and increasingly, North America.

The IPO filing comes on the heels of its fourth acquisition in less than three years: Canadian loyalty platform Kognitiv. This deal follows previous acquisitions of Persuade, Brierley, and Rewards+, positioning Capillary as a global player in the omnichannel loyalty market. The company says the Kognitiv acquisition adds over 30 enterprise customers and strengthens its personalization and data insights capabilities.

Capillary reported revenue of Rs 600 crore in FY24, up 80% year-over-year. Net losses narrowed to Rs 59 crore, reflecting a 33% improvement. The company projects FY25 revenue to reach Rs 650 crore with EBITDA margins of 15%, a significant leap from FY21 revenue of Rs 123 crore. The growth has been driven by a mix of organic expansion and strategic M&A.

In 2023, Capillary raised $140 million (Rs 1,201 crore) in a Series D round, with $95 million of that constituting secondary share sales. The round brought new investors such as Pantheon, 57Stars, and Unigestion to its cap table. Capillary has raised over $240 million in total funding to date.

Ahead of its IPO, Capillary has also expanded its employee stock ownership plan (ESOP) pool by 123%, from 32.6 lakh to 72.91 lakh options, now accounting for 9.04% of the company’s share capital. The expanded pool is estimated to be worth around Rs 212 crore, out of a total ESOP pool value of Rs 384 crore. Of the company’s total funding, $20 million has been allocated toward employee payouts through ESOPs.

Capillary’s parent company is incorporated in Singapore and owns 98% of the Indian operations. This holding structure could draw regulatory attention as SEBI and the Indian government scrutinize foreign ownership in tech startups, particularly in the context of outbound corporate structures and reverse flipping to India.

The planned listing comes amid a renewed wave of IPO activity in India’s tech and SaaS sectors. At least 20 startups—including Razorpay, Lenskart, Groww, Shiprocket, PhysicsWallah, boAt, and Urban Company—are reportedly preparing to go public in 2025. Against that backdrop, Capillary’s revival of its IPO strategy appears well-timed.

Unlike most startups that raise a pre-IPO round to lock in valuation, Capillary has chosen to proceed without one. The company is targeting a valuation of $500 million to $1 billion (Rs 4,290 crore to Rs 8,580 crore).