High school science taught us about “capillary action”. It is the ability of a liquid to flow in narrow spaces without the assistance of, or even in opposition to, external forces like gravity. True to its name, Bangalore-based customer relationship management (CRM) software startup Capillary Technologies Capillary Technologies The Ken Every move you make, Indian offline retailers will be watching you Read more has emerged as a formidable but largely unheralded SaaS startup.

Capillary offers an omnichannel CRM and e-commerce platform to retail chains, enabling them to track, engage, and reward customers. Over the last twelve years, it has found a way to cash flow profitability at scale, with annual recurring revenue (ARR) in the $40-50 million range.

But this flow hasn’t been without its fair share of ups and downs. Over the past twelve years, Capillary has ebbed and flowed—from huge funding rounds to existential crises, from dreams of global domination to a sharp geographical focus. In today’s interview, Aneesh Reddy, Capillary’s founder and CEO, shares this eventful journey.

Q. Capillary completed 12 years last month. Your journey has been interesting and eventful in so many ways. More than $100 million in funding, more than a thousand employees, an ARR of close to $50 million. Yet your journey has been different from the archetypical “successful startup” saga. It is one that has seen great highs as well as lows. How does it feel to look back on this?

It has been eventful for sure. Twelve years back, when we started the company, if someone had told me that this is where we would be in twelve years, we would have taken it gladly.

Q. Let’s talk about the beginning. Contrary to many startup origin stories where founders try to solve a problem that they themselves were facing, your start was different.

We started in August 2008. Exactly a month before Lehman Brothers tanked. And that’s important from the standpoint of what we ended up doing. My co-founder Krishna Kumar and I were two kids—I was 23. We didn’t have a big idea or anything like that but we wanted to do something of our own. We figured that the best way to decide what to do was to see this like an investor—what sectors are in demand, what services are growing, where are the gaps.

We wanted to narrow down our choice to two sectors which are doing well so as those sectors grow, you grow with it. The two segments we ended up choosing were retail and mobile. I remember that organised retail really started in India only in 2007 or thereabouts. That’s when multi-brand FDI licenses were issued and global brands started opening stores in India. And the mobile revolution was of course just beginning.


Sumanth Raghavendra

Sumanth is a serial entrepreneur with more than eighteen years experience in running startups. He is currently the founder of Deck App Technologies, a Bangalore-based startup attempting to re-imagine productivity software for the Post-PC era. Sumanth’s columns appear regularly in leading publications. He holds MBA degrees from the Indian Institute of Management, Bangalore and Thunderbird, The American Graduate School of International Management, USA.

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