Customer engagement and loyalty software provider Capillary Technologies has extended its latest Series D round to $140 million and raised $95 million in secondary transactions to provide exit to existing investors and employees.

The company had last year raised $45 million as a part of the round, which consisted of $39 million of equity and $6 million in debt.

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This comes at a time when the company is looking to list on the Indian bourses in the next 18 months, its second attempt in recent years, company founder and managing director Aneesh Reddy told ET.

It had filed for its draft prospectus in 2021 with markets regulator Securities and Exchange Board of India (Sebi) and subsequently withdrawn it by March, last year.

As a part of the latest tranche, the company has also picked up an additional $6 million in equity funding from the likes of angel investors, including Ajay Gupta, former senior partner at McKinsey & Company; Hal Brierley, founder of Brierley+Partners among others.

With this, Capillary Technologies has raised a total of $45 million in equity and $95 million in secondary funding, as a part of the Series D round.

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The secondary portion saw participation from the likes of 57Stars, Pantheon, Unigestion, The Evolvence Group, which are also limited partners of one of its largest shareholders, Avataar Ventures.With the secondary raise, Capillary’s existing investors like American Express and Warburg Pincus who invested before 2016 are taking full and partial exits respectively, along with angel investors.

Avataar Ventures held a 19% stake in Capillary Technologies, as of October last year, according to research platform Tracxn.

In a secondary transaction, the funding does not go into the company’s coffers.

However, a large chunk of the secondary raise, roughly $20 million, has gone towards giving exits to Capillary’s former and current employees, Reddy told ET.

“The secondary transaction in our case priced at a premium of the primary, given the gap of six months and growth seen by the company. With the secondary raise, we now have almost 15-17% of our captable comprising of pre-2015 investors. Going forward most of our funding will be to give exit to our investors,” said Reddy.

With the fresh equity raise, the company is expected to use the capital to fuel its internal generative artificial intelligence (AI) initiatives and partnerships, as well as to go deeper into existing markets of US and Europe.

It forayed into the North American market back in 2021 with acquisition of customer experience platform Persuade. In three years, the US geography is already contributing to 65% of Capillary’s revenues. Europe and Asia are other markets where Capillary counts its presence.

According to sources, Capillary is touching an annual revenue run rate (ARR) of roughly $75 million.


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