Servify raises $65 million funding; to launch IPO in 18-24 months

Sreevathsa Prabhakar founded Servify in 2015.

Servify, which powers the after-sales experience for a range of device manufacturers, on August 24 said it raised $65 million in Series D financing led by Singularity Growth Opportunity Fund, bucking the funding slowdown in late-stage startups due to tough market conditions.

Strategic investors such as US insurance holdings firm AmTrust, family offices, including that of Fevicol-maker Pidilite, along with existing investors such as Iron Pillar, Beenext, Blume Ventures, and DMI Sparkle Fund also participated in the round.

The company plans to use the funds to expand its products, scale its technology platform and grow its business in international markets apart from scouting for acquisition opportunities.

While Servify didn't disclose its valuation in this round, founder Sreevathsa Prabhakar told Moneycontrol that were closing in on a $1 billion valuation.

Ready to go public

"We are not somebody who's valuation hungry since we want to build a really strong business. One thing I can tell you is we will go public in about 18 to 24 months, we are doing everything required to go public. Let the markets decide the valuation rather than any private investor" Prabhakar said.

Started in 2015 by Prabhakar, Servify works with several global original equipment manufacturers (OEMs) such as Apple, Samsung, OnePlus and Xiaomi to run their after-sales product care programmes, including providing extended warranty coverage. It also powers the smart exchange and upgrade programmes for such brands.

The startup claims to have partnerships with over 75 brands that include retailers, distributors, insurers, financial institutions, product liquidators, service providers, and carriers, besides consumer electronics manufacturers.

Nokia, Etisalat, Croma, Walmart, Reliance Retail, Amazon, and Flipkart are some the brands it works with.

Driving affordability

Servify recently extended its platform to enable affordable purchases by aggregating features such as no-cost EMI, card-linked offers, Buy Now Pay Later (BNPL) and instant discounts among others.

Prabhakar told Moneycontrol that they were running a pilot on this aggregation model in over 200 Apple-authorised reseller stores in cities such as Delhi, Mumbai and Nagpur.

"We will run this pilot for another three to four months. Once we learn all the market nuances, then we will probably scale across all the outlets where we are present" he said.

Servify claims to have a distribution presence in more than 50,000 outlets.

Prabhakar, however, said the firm was not taking any risks on its books. "The idea is to provide a single platform where the entire digital customer KYC to lending decisions to underwriting will happen digitally," he said.

The move would also enable the company to bring in new lenders who do not have a retail distribution presence to simply plug onto their platform and participate in the lending play, he said.

The aggregation model would help Servify expand its capabilities to an entire product lifecycle—from helping customers buy a product to help them use it for a longer time and then enable an upgrade or exchange the product, Prabhakar said.

"We are building a massive global business from India that is already at an annual revenue run rate of over $130 million and is on the verge of turning profitable," Prabhakar said.

International expansion

Global expansion is a big focus area for Servify. Prabhakar said international markets contributed 40 percent to the business and they expected to double it to 80 percent over the next two years.

"International markets will grow faster than India because those are mature markets, your ticket sizes are big and the profit margins are better," he said.

Servify said it has increasingly gained adoption in North America, the European Union, the UK, Turkey, Saudi Arabia and the United Arab Emirates as well as other Gulf Cooperation Council countries.

It has a presence in about 40 countries and employs more than 700 people globally.

The startup was evaluating a few acquisition opportunities, which could it entry into new markets, access to new product capabilities or new customer contracts, Prabhakar said without sharing specific details.

"Product protection is no longer an afterthought; in fact, it is rapidly taking centre stage for both OEMs and consumers. We, therefore, see Servify steadily moving towards global leadership in this massive addressable market of over $100 billion,” said Apurva Patel, Managing Partner, Singularity Growth.

Anand Prasanna, Managing Partner at Iron Pillar, said they were delighted to partner with Sreevathsa and his outstanding global team which expanded into North America, Europe, the Middle East, Turkey and Asia in a short period.