SaaS firm MoEngage to raise $200 million from ChrysCapital, A91, Goldman Sachs

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Customer engagement platform MoEngage is in talks to raise $200 million in a new funding round, led by ChrysCapital, with participation from A91 partners and existing investor Goldman Sachs, according to sources.

The funding round will be a mix of primary and secondary capital. While the primary component will go towards paying tax to flip back from the US to India, the secondary component will be used to buy shares from some of its early investors, per a source. While the valuation is still working in progress, the round will likely be closed with a valuation of $750-800 million.

"MoEngage doesn't need money for operations, the money is mainly to pay a flip tax to the tune of $100 million to domicile in India, ahead of a future IPO," one of the persons cited above said.

“At this point, MoEngage has no comments to offer regarding any funding-related speculation or market rumours. Should there be any developments to share in the future, we will be sure to keep you updated directly,” a Moengage spokesperson said responding to Moneycontrol’s query.

This would mark one of the largest SaaS funding deals in recent months and comes at a time when investors are doubling down on enterprise software bets with strong fundamentals and a clear path to profitability.

Moneycontrol was the first to report that MoEngage is considering relocating its headquarters from San Francisco to India, amid a broader trend of startups shifting their legal base back to the country to capitalise on the booming domestic IPO market. The cost of this flip is expected to be $100 million dollars.

PhonePe's investors reportedly paid around Rs 8,000 crore in capital gains tax during the relocation process. Groww is estimated to have paid approximately Rs 1,340 crore in taxes when it merged its U.S. entity into the Indian business. Razorpay, which is in the process of reverse-flipping, is expected to incur a tax outgo of nearly Rs 1,245 crores.

ChrysCapital, A91 Partners, and Goldman Sachs did not respond to queries until the time of publishing. The story will be updated as and when they respond.

In an interview with Moneycontrol, ChrysCapital’s Partner and Chief Investment Officer, Sanjay Kukreja, disclosed that the firm has an exit pipeline of over $3 billion via IPOs over the next three years, with as many as six portfolio companies lined up for public listings, spanning enterprise tech, consumer, healthcare and financial services sectors.

MoEngage, founded in 2014 by Raviteja Dodda and Yashwanth Kumar, provides AI-powered analytics and customer engagement tools to enterprises. The platform enables personalized communication across mobile, email, web, and other channels, and counts global brands like Nestle, Airtel, Flipkart, among its clients.

The company’s AI-powered platform enables brands to analyse user behavior and automate campaigns to drive retention and engagement.

The firm raised $77 million as a part of its Series E funding round led by Goldman Sachs Asset Management and B Capital, the company said in a statement on June 1, 2022. MoEngage has raised more than $180 million to date.

Also Read: Tiger Global-backed CleverTap plans reverse flip to India from San Francisco

SaaS companies like CleverTap and Amagi are increasingly looking to shift their legal base to India as the path to a public listing becomes more viable on home ground.

Also Read: Change of heart: Indian SaaS firms prefer Dalal Street over Nasdaq for IPOs

One of the biggest factors driving this trend is the relatively lower revenue threshold required to go public in India compared to the US. While US markets often expect SaaS companies to cross $100 million in annual recurring revenue (ARR) before considering an IPO, Indian stock exchanges are more flexible, with some tech firms exploring listings even at $40-50 million ARR.