FirstPOS, Salon Software India, Gingerpan, Precious Spa. If none of these companies sound familiar, it’s probably because they’ve joined the deadpool deadpool Deadpool This is the term given to a list of failed startups that are dead or dying over the last few years. They had one more thing in common—they were all startups trying to sell the spa and salon market in India software to run their businesses better.
Now, does the name Zenoti sound familiar?
Like the companies mentioned above, Zenoti is a SaaS startup that offers an enterprise resource planning (ERP) and customer relationship management (CRM) solution to salons and spas. The company helps them manage their bookings, sales, expenses, and marketing, currently servicing over 1,000 brands. It also has a footprint of 12,000 stores across the world.
Unlike these other startups, though, Zenoti is far from being deadpooled. Just last week, the company raised $160 million in its latest funding round latest funding round Livemint Zenoti enters unicorn club with $160 million fundraise Read more to become India’s latest unicorn startup. But more notably, Zenoti is India’s first vertical SaaS unicorn.
India has seen four SaaS unicorn startups before Zenoti—Freshworks*, Druva Druva The Ken Druva: An Indian cybersecurity solution with an India problem Read more , Icertis, and Postman Postman The Ken How Postman delivered a US$2 billion valuation Read more . All these companies offer horizontal solutions. That is, products purchased by a wide range of companies across multiple industries or business functions.
Zenoti, on the other hand, caters only to one industry vertical—spas and salons. By virtue of this focus, the total addressable market size for companies like Zenoti is generally considered much smaller. This is particularly a problem for venture capitalists and investors as there is a perception that such markets will struggle to offer multi-billion-dollar exits that inform most funding hypotheses. The popular consensus is that if you aren’t playing in a SaaS market that is at least $25 billion in size, it is hard to get to a billion dollars in annual recurring revenue (ARR).
If that wasn’t bad enough, Zenoti had another challenge on its hand—its presence in India.
Hyderabad-based siblings Dheeraj and Sudheer Koneru began Zenoti—then known as ManageMySpa—in 2010, with operations in the southern Indian city and a holding company in the US.