Ten Indian startups have become billion-dollar valued companies or unicorns in the first four months of 2021, in what is a historic moment for the Indian ecosystem. Of this, six turned unicorns this week on consecutive days, underscoring the heightened funding interest in startups here. The latest to join the list is Gupshup, a messaging platform with operations in Mumbai and the US.
It has raised $100 million from Tiger Global at a valuation of $1.4 billion and is eyeing a public listing soon, its CEO Beerud Sheth told Moneycontrol. The company is also looking to a second round of funding worth more than $100 million from multiple investors soon, Sheth said.
Founded in 2004, the company’s last funding round was in 2011. It reported an annual revenue run rate of $150 million in 2020.
Gupshup is the 10th unicorn, privately funded companies valued over $1 billion, announced in the first four months of 2021, compared to 11 in 2020. Apart from Gupshup, Groww, Sharechat, PharmEasy, Meesho, and CRED became unicorns this week. The others who made the list this year include Digit Insurance, Innovaccer, Infra.market and Five Star Business Finance.
Funding and growth plans
Gupshup is a messaging platform that helps businesses and customers interact with ease using mediums such as SMS, and WhatsApp. This is how it works. The company has developed an application programming interface (API) that enables banks or an airline to inform and interact with customers through SMS, or WhatsApp. The company generates revenue on a per-message basis from the enterprises.
For the firm, over 80 percent of the business comes from India followed by the US and Latin America.
Explaining the timing of the funding, Sheth said that post the pandemic the company saw substantial growth in business. This assumes even more significance given that on the back of the pandemic, businesses across had to shift online to ensure business continuity.
But designing an app for every small business will hardly help. That is where companies like Gupshup has a role to play. By using these platform, these companies can read to customers through WhatsApp and SMS, and that is where a huge demand lies.
But to grab that opportunity, the company will have to invest in developing products and tools for different markets and services.
That is where the funding would help. It will aid in building products and also expand its sales and marketing such as building local customer support in various regions. The company is currently looking at expanding to emerging markets such as Latin American countries like Brazil, which are on a similar growth trajectory like India. Sheth said that the US and Europe too have growth opportunities that Gubshup wants to tap into.
The company expects 40-50 percent growth in revenue, if they can attract more consumers to the platform.
The company has bigger plans too. “At some point we will also look at public listing, IPO and so on,” Sheth said.
“As a company, we want to be ready within the year, maybe later this year. But the actual listing depends on external factors that are not in our control,” Sheth said. So the company will focus on building the right organisation, with a business model that is predictable and profitable.
“Most companies will have to think in terms of years and for us, it is a matter of quarters. But approximately in a year’s time frame,” he added.
Sheth previously founded and led Elance (now Upwork), a publicly listed company in the US. He previously founded and led Elance (now Upwork, a publicly listed company), the pioneer of online freelancing and the gig economy.