Capillary Technologies Adds $15.5M to Take Loyalty & CRM Platform Global

Today Bangalore-based Capillary Technologies announced it has raised $15.5 million in funding from Norwest Venture Partners and Sequoia Capital for its cloud-based loyalty and CRM platform. Existing investors Qualcomm Ventures, who put $100,000 into the company after it won its QPrize business plan contest in 2009, also participated in the round. The company works with over 100 brands across 10,000 locations, including Pizza Hut and Nike, helping them engage with customers in-store and online through loyalty programs, mobile engagement, and online outreach.

Despite launching in 2008, the company has built up a lot of traction in the past year, going from processing four million transactions a month about a year ago, to processing 8.5 million transactions per month in May 2012. The company has offices in cities including Dubai, London, and Singapore, and recently opened offices in California. Co-founder Krishna Mehra said in an interview that the funding will be used for product development and U.S. expansion, since they’ve focused more on the Asian market to date, with about 80 percent of their revenue coming from India and Southeast Asia. He also said they’re planning to add to their sales and marketing teams around the world.

Capillary’s primary product is its !nTouch customer engagement platform, which lets retailers set up and manage loyalty programs. The cardless cloud-based program, which retailers pay a monthly per-location fee to use, integrates with major POS systems like Retail PRO, and lets users sign up in a variety of ways, by scanning a QR code, signing up with Facebook, etc. Using Capillary’s analytics platforms, retailers also get analytics based on how campaigns are performing, and can target offers, recommendations, and deals.

The !nTouch platform is meant for large retailers who want to implement it across all their locations, although the company is also beta testing their TruTouch platform, which is similar but meant for retailers with 1-5 locations. That program is in testing in 200 stores in India and will be rolled out globally next year. “The most important part of what the retailer wants [out of] their loyalty program is to understand customer behavior in a much better fashion,” Mehra said. “So we kind of provide them a platform that helps them capture customer data in real-time at the store.”

Mehra said the company’s primary target audience is non-grocery retail chains that have between $50 million and $2 billion in annual revenue, everything from restaurants and quick-service restaurants, to clothing chains, to sporting goods chains. He said they also work with some ecommerce companies to handle their analytics and loyalty programs as well. They have about 300-400 unique clients, though a number of them are smaller retailers.

There are a variety of companies tackling mobile loyalty programs, including Belly, as well as social CRM tools like Dynamic Signal, and analytics solutions like Custora that aim to help companies understand their customers and target deals accordingly. Mehra said he believes Capillary has a unique advantage because it connects with a retailer’s POS system. “The difference that we have is our capability to integrate with the point-of-sale in real-time,” he said. Also, many of the loyalty programs on the market target small businesses, while right now Capillary is strictly targeting large retailers (though next year’s TruTouch launch will change that).

Co-founder Aneesh Reddy told in May that they want Capillary to become the Salesforce of retail CRM. “In terms of the tools that we have, in terms of the products that we’ve managed to build, we’ve managed to get a very good story in place,” he said. “What we want to do next is to build out the necessary sales teams and marketing so that we are able to establish that leading presence.” The company reports that retailers have seen a 10 percent increase in same-store sales using Capillary’s solution, and if they can keep up that level of improvement for more retailers while building out a global presence, they are poised to be a leader in the new mobile, social, and in-store loyalty space.




Erin Bury

Erin Bury

Erin Bury is a Co-founder and CEO at Willful, an online estate planning platform. Also a former Managing Director at Eighty-Eight, a creative communications agency based in Toronto. She was formerly the Managing Editor at BetaKit. Follow her on Twitter at @erinbury.

0 replies on “Capillary Technologies Adds $15.5M to Take Loyalty & CRM Platform Global”