Capillary Tech to file IPO documents by October; Warburg, others to trim stake

The company’s board approved an initial public offering of ₹2,250 crore, of which ₹500 crore is a fresh issue of shares and ₹1,750 crore is an offer for sale by existing investors, according to a filing with the ministry of corporate affairs earlier this month.

Investors such as Warburg Pincus and Avataar Ventures will sell a part of their stakes in the IPO to reach minimum public shareholding norms, the people added. Warburg Pincus first invested in Capillary in 2018 in a $20 million round, alongside Sequoia Capital. Avataar joined the cap table in 2023 in an equity and debt round that totalled $140 million.

“The company is on track to list this year. It is likely to be valued at $1.2-1.3 billion. All investors are bullish on the growth of the company but will sell to meet the minimum public holding requirements,” one person told Mint, requesting anonymity.

This is Capillary Technologies’ second attempt at a public listing. It joins startups including Navi and Droom that had initially pursued IPOs during the 2021 boom but are now making a renewed push to go public this year.

The company first filed a draft red herring prospectus in December 2021 for a fresh issue of equity shares worth ₹200 crore and an offer for sale of ₹650 crore, totaling ₹850 crore. However, the company did not proceed with the listing at the time.

Queries sent to Capillary Technologies, Warburg Pincus, and Avataar Ventures did not elicit a response at the time of publishing the story.

Brand loyalty

Founded in 2012 by Aneesh Reddy, Ajay Modani, and Krishna Mehra, Bengaluru-based Capillary Technologies helps businesses across various industries to improve customer engagement, drive sales, and build brand loyalty through their AI-powered platform.

It has a presence across the US, India, the Middle East, and Asia – in particular, Southeast Asia. The company reported revenue of about ₹600 crore in FY24, up 80%, while its net loss narrowed to ₹59 crore.

In May, the company acquired assets from bankrupt Canadian firm Kognitiv in a bid to expand its North American presence and gain access to over 30 enterprise clients.