Capillary Technologies expands its Series D round to $140 million; allocates $20M for ESOP payout

Capillary Technologies, a customer engagement and loyalty software services startup, has expanded its Series D funding round to a total of $140 million.

This comes as the company raised $95 million through secondary transactions aimed at providing exits for existing investors and employees. Capillary, which initially raised $45 million in this round, is now setting its sights on an IPO in the Indian market within the next 18 months.

Strategic secondary transactions

The recent funding includes $95 million from secondary deals, where existing investors sell their shares to new ones. This move allows for a strategic exit for early backers, including American Express and Warburg Pincus, and rewards both former and current employees with approximately $20 million in exits.

Notably, the secondary transactions were executed at a premium.

Fueling growth and innovation

With an additional $6 million in equity funding from notable angel investors, Capillary Technologies plans to channel these funds into its generative artificial intelligence (GenAI) initiatives and expand its footprint in the US and European markets. It aims to solidify its position in the customer loyalty space.

Boasting global presence 

Capillary Technologies boasts a strong global presence, with significant growth in the United States, where it now generates 65% of its revenues. The company said that its platform, which is known for powering over 100 loyalty programs across more than 30 countries, has reached over a billion consumers.

It claims to have an annual revenue run rate (ARR) of roughly $75 million.

ESOP payouts

The company has also allotted $20 million of the raised funds for Employee Stock Ownership Plan (ESOP) payouts.

“Our employees are the backbone of Capillary’s success, and we are dedicated to rewarding their hard work and dedication. The ESOP allocation reflects our commitment to fostering a culture of ownership and accountability within our organization," said Founder & MD, Aneesh Reddy.

Mohan Kumar, Managing Partner at Avataar Ventures said, “We are excited to see Capillary Technologies’ continued growth and innovation. As an investor, we believe in the company’s vision and are confident in its ability to disrupt the customer loyalty space. The expanded Series D funding and commitment to employee ownership reflect Capillary’s strong leadership and potential for long-term success.”

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