The round catapults in Bellevue, Washington and Hyderabad, Zenoti, into the coveted Unicorn club, making it only the fifth company of products of Indian origin, after Freshworks, Druva, Icertis and Postman. It also brings the total amount of capital raised by the company to $ 250 million so far.
Zenoti said its programs exceed 12,000 businesses across 50 countries, offering mobile phone solutions for appointment programming, self-registration, payments, employee management and even inventory. The company said it has seen strong growth during 2020, driven by businesses updating their program during the Covid-19 pandemic.
“We got really good traction in the United States. This year we have grown more than 100% and feel that next year we also aim to grow at least 100%. Our actual board commitment looks like a 120% growth for next year, ”said Sudheer Koneru, founder and CEO of Zenoti, without commenting on the company’s revenues.
According to people tracking the company’s finances, Zenoti was around the $ 35 million annual return revenue (ARR) at the end of 2019. Koneru said Zenoti was on track to break the $ 100 million ARR threshold in the next 18 months. , with “a fairly small burn of about $ 1 million a month.”
Zenoti said it will use the fresh capital to continue to scale its operations and invest in R&D for innovations through AI and intelligent algorithms that will assist its customers in better inventory management, customer planning, marketing and dynamic pricing. It also said the funds will be used for inorganic growth through acquisitions.
“We felt we could use the money for R&D, get into new verticals (pet spas, group classes) and also for M&A purposes. We see a lot of players struggling now, and it’s getting worse, so there might be a kind of industrial consolidation and we will be on the driver’s seat, ”added Koneru.
He added that Advent’s investment thesis revolves around Zenoti publishing in the coming years. Although it did not disclose a specific timeline, Koneru said it will start looking at an IPO when the company reaches about $ 200 million in ARR, giving it significant scope and influence in the market.
“The welfare industry is maturing for disruption, especially as Covid-19 is more important than ever to eliminate unnecessary face-to-face interactions wherever possible,” said Eric Wei, Managing Director of Advent’s technology team in Palo Alto.
The US market moves 60% of Zenoti’s trade, followed by the UK, which occupies almost 20% of the company’s new reserves and Australia and New Zealand in third place. In India and West Asia, while some of the largest salon and spa chains are using Zenoti’s software on new reserves, they remain behind Western markets.
Zenoti’s rise to become a billion-dollar SaaS company along with the few others before it’s a great analogy to inspire more entrepreneurs to start building software production companies, according to Shekhar Kirani, a Partner at Accel, who was an early supporter of Zenoti. For him, India can become for SaaS what IT Services did two decades ago.
“Now there is a product mindset and the way the ecosystem has come together and pays it forward is something you will not see in any other sector in India. Every founder wants to help another founder, you are not getting that in the consumer sector,” Kirani said. . “Customers around the world have also changed. They don’t care where a product is built, if it’s good. ”