Atomicwork raises $11 million in seed round led by Matrix Partners and Blume Ventures

Atomicwork Founders L to R - Kiran Darisi, Vijay Rayapati and Parasuram Vijayasankar

Atomicwork, a Business-to-Business (B2B) Software-as-a-Service (SaaS) startup, has raised $11 million in its seed funding round led by Matrix Partners and Blume Ventures despite a tough funding environment in India and in the US markets.

The round also had participation from Storm Ventures, Neon Fund, and prominent angel investors from Silicon Valley and India.

San Francisco and Bengaluru-based startup Atomicwork plans to utilise the funding towards product development, engineering, and marketing activities in the coming months.

"With the new funding, we will be focussing on AI engineering, US got-to-markets, and enhancing the market capabilities...Within AI engineering we are building domain-specific language models," Said cofounder and chief executive officer, Vijay Rayapati to Moneycontrol.

The firm has about 50 employees located in the US and India and is looking to add more within the sales, marketing, and engineering teams.

"We are looking to hire talent for Sales and Sales Engineering domains and the long-term vision for the company is to become an internal operations management system and we will invest more in our platform engineering and other capabilities as well," He added.

Founded in 2022 by Vijay Rayapati, Kiran Darisi and Parsuram Vijayasankar, Atomicwork is an employee success solution that brings employees, IT systems, and HR operations together to drive business impact across any organisation.

Rayapati was the founder of SaaS firm Minjar in Bengaluru, which was acquired in 2018 by US-based Nutanix for an undisclosed amount. Darisi and Vijayasankar come from the Freshworks' founding team where Darisi was the VP and engineering and Vijayasankar was the cofounder of Freshworks.

In the next 12 months, Atomicwork is aiming to add about 100 plus mid-market and enterprise customers on to its platform.

"Atomicwork is leveraging AI to solve this problem while simplifying the number of tools employees interact with daily. Atomicwork sits on
top of collaboration tools like Slack and Microsoft Teams, and uses conversational intelligence to automate support, service delivery, and operations at scale," Rayapati said.

While the seed round funding is usually around $2 million to $5 million, the company has secured a large deal size of $11 million.

"We were in stealth mode for sometime, we mostly spent time working on building the product...We received this interest from investors who believed in us and we thought instead of raising several rounds in the future we can use this for a long runway," Rayapati added.

Despite a tight funding environment for startups, B2B SaaS has been securing investment from several investors as it is considered a safe bet in terms of returns.

Within the last few months, several VCs have set up funds exclusively to back SaaS startups in India.

Early-stage Venture firm Pentathlon Ventures also announced Rs 450 crore Fund II which will exclusively back startups within B2B SaaS and AI space.

Arkam Ventures announced on June 27 the launching of its Fund II with a target corpus of $180 million and said that it will focus on B2B SaaS.

Similarly, in April, SaaS-focused VC Boldcap launched its $25 million Fund II. Around the same time, venture capital investor Iron Pillar, which has backed the likes of FreshToHome, Uniphore, Servify, and Curefoods, closed a $129-million fund

In May, Chiratae Ventures, which has invested in SaaS firms like Active.Ai, Pando, and CloudCheery, announced the close of its Rs 1,001 crore growth fund.

"Blume's relationship with this special group of entrepreneurs began many years ago, thanks to a prior fund. We're very excited to invest in this transformative space and support Atomicwork as they reshape the future of employee experience and success," said Sanjay Nath, Partner at Blume Ventures.