Exotel said on Tuesday it has raised $40 million in a financing round, just three months after securing $35 million in funding, as the Bangalore-based startup demonstrates growth for its full-stack customer engagement platform in emerging markets.
Steadview Capital led the startup’s Series D round. Exotel, which counts Blume Ventures and IIFL Asset Management among its backers, has raised about $100 million in a mix of debt and equity rounds in the last 12 months.
Exotel offers its clients a full-stack platform with offerings such as contact center, APIs, voice and chat bots, to engage with their customers through touch points such as web chat, co-browsing and videos.
Indian ride-hailing giant Ola uses Exotel’s platform to send text messages to its customers. Food delivery giant Swiggy relies on the startup to mask the phone numbers when the delivery partner makes a call to the customer. Relationship managers at HDFC Bank, a large bank in India, use Exotel to engage with customers with a savings account.
This engagement “involves bringing together disconnected channels, bots, applications with siloed customer data across teams,” said Shivakumar Ganesan, co-founder and chief executive of Exotel. “For the first time we are enabling this over the cloud with our full-stack platform.”
The startup operates in a space that has attracted the attention of several major giants, such as Microsoft, Amazon, Twilio, Salesforce and Zoom in recent years as organizations scramble to build or acquire tools to create one-store service centers.
But Exotel has two clear differentiating factors in the otherwise crowded field, said Ganesan in an interview with TechCrunch. The startup focuses on serving customers in emerging markets and, unlike many of its global competitors, it offers a wide range of services.
“Practically everyone in India is our customer,” he said. The startup, which has also expanded to Southeast Asia and the Middle East in recent years, has amassed over 4,000 customers, some of which it gained after its recent acquisitions of cloud center platform Ameyo and conversational AI startup Cogno AI. Bajaj Allianz, City Mall, KrazyBee, Shadowfax and TCS started to use Exotel's platform in the last 12 months.
Ganesan attributed some of its recent growth to the pandemic, which he said has made communication technology a “source of life” for several enterprises and businesses in banking, fintech and auto industries.
"The importance of having effective communication strategy is increasing over time and Exotel executed this successfully by powering communication to almost all internet unicorns in India," said Puneet Kumar, managing director at Steadview Capital, in a statement. "We like their vision of building an end-to-end communication stack to enable enterprises to engage intelligently with customers and are thrilled to be part of their next growth phase."
The startup, which employs more than 1,000 employees, today generates an annualized recurring revenue of $50 million. It aims to grow this figure to $200 million as it broadens its offerings and wins more customers. It's also looking to hire about 200 people by the end of the year.
Karthik Reddy of Blume shared the story of how his firm chased to invest in Exotel, which he described as "one of the buzziest" deals it had won at the time. The blog post from last year also recounts the struggle the super hot startup faced in its lukewarm years.
"There was a lot of visibility for the company in digital and traditional media as it kept building beyond the odds. Then there was some regulatory scare. Good press can alert various competitors – from large telcos to larger funded companies. Others in the sector too got similar scares. The company had to double down on ensuring that they were well above board and procured whatever licenses it needed. The bank balance dipped to 14 lacs at a point in 2014-15.
Investors would show excitement and then shirk away. Over 6 years, between 2012 and 2018, we lost count of near miss term sheets, half-hearted term sheets (e.g.”we will invest $3 mill contingent on another $3 mill being committed by a co-lead”), merger and acquisition offers from everyone, Indian competitors to Asian telcos to American giants.
Clearly, the segment was considered interesting enough that we needed to see a desi Twilio emerge."