Gupshup raises $240 million for share buyback ahead of possible IPO

Mumbai: Gupshup, a conversational messaging platform, has raised $240 million from Tiger Global and Fidelity in a secondary transaction ahead of a potential initial public offering (IPO) in the US next year.

More than 100 employees of Gupshup managed to sell shares to public markets investors in this round, which follows the
$100-million primary fundraise in April, cofounder and chief executive officer Beerud Sheth told ET. The 16-year-old company became a unicorn then.

“This funding round was driven by strong investor interest in Gupshup, given the overall growth in the conversational messaging space and the innovation-led market leadership position Gupshup has established,” Sheth said. “Some of the funds from this round will be used for a share buyback from employees and investors that supported the company for nearly 15 years.”

In a secondary transaction, the capital does not go into the company coffers but to existing investors who are offloading stock for a partial or full exit from the firm.

“There was still more investor interest, and the company wanted to build relationships with the public market investors. So, having a relationship with them now will help us in doing an IPO later,” Sheth said.

Gupshup will use its existing funds to explore acquisition opportunities to fill existing product gaps in its portfolio, and help it expand into adjacent spaces. The firm, which raised funds in April after a gap of 11 years, will continue to invest in product innovation for digital commerce enablement and expanding its go-to market initiatives in mobile-first economies around the world. The messaging app is also expanding its executive team with leadership hires in corporate development, international business development and sales, among others.

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According to Sheth, Gupshup clocked an annualised run rate of about $150 million in 2020 and is growing at 60% year-on-year.

“We see substantial growth in India’s digital economy,” Shashin Shah, managing principal at Think Investments, said. “Gupshup’s platform is an essential tool for businesses building a digital footprint. We’re excited to partner with Gupshup, given its market-leading position, innovation-led growth and attractive financial profile.”

The company provides AI-powered voice bots on messaging apps, allowing customers to transact on these platforms using them. It powers over six million messages a month. It is present in India, South America, Southeast Asia, Middle East, Eastern Europe, Africa and the United States.

Founded in 2004, the company has experimented with several business models in the messaging segment over the years, and later pivoted to an enterprise messaging business providing customer and brand engagement solutions for developers and large businesses across various sectors.

Sheth said that the company is witnessing a lot of traction from fintech and lending players. It also recently launched “order direct” messaging-based marketing solutions to promote offers and mobile-based management tools for restaurants.

Gupshup’s current suite of solutions includes messaging APIs, a bot platform, bot-building tools, a scripting engine, an omnichannel inbox, and conversational experiences among others.



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