Gupshup may opt for US listing next year

Debangana Ghosh Mumbai | Updated on July 28, 2021

The company raised $240 million led by Fidelity, Tiger Global

Conversational AI unicorn Gupshup is looking to list its shares on the bourses next year. Beerud Sheth, co-founder and CEO of the company told BusinessLine that the listing may be done on US stock exchanges.

“We are looking for an IPO sometime next year but that will depend on the market conditions. We don’t think of the IPO as the destination, it will be a new beginning. Once you go public, the bar is set quite high. You will have to produce results reliably and be scalable,” he added.

Sheth added that the company is not necessarily looking at getting listed in India, and it will mostly get listed in the US.

On Wednesday, the company announced that it has raised $240 million in the second close of the growth round at the earlier valuation of $1.4 billion. Investors participating in the round include Fidelity Management and Research Company, Tiger Global Management, Think Investments, Malabar Investments, Harbor Spring Capital, certain accounts managed by Neuberger Berman Investment Advisers, White Oak, and Neeraj Arora among others.

Gupshup entered the unicorn club in April 2021, raising $100 million in the first tranche of the current round.

Fund usage

A major portion of the capital raised will be utilised for secondary purchase of shares from current and former employees as well as prior investors, co-founder and CEO Beerud Sheth told BusinessLine.

Apart from this, the start-up will be investing in growing sales and marketing teams across globe for its go-to-market initiatives, as the company looks to expand into other geographies. Gupshup is also looking at strategic merger and acquisition opportunities to grow business.

“We are closing the second fund raiser at $1.4 billion valuation raising over $200 million. So, more than 15 per cent of the company shares will be bought back and given to new investors,” Sheth said.

“For M&A, we are looking for companies which can either fill certain product gaps or will help us venture into adjacent segments and additionally give us more geographical coverage,” he added.

Shashin Shah, Managing Principal at Think Investments said, “We see substantial growth in India’s digital economy. Gupshup’s platform is an essential tool for businesses building a digital footprint. We’re excited to partner with Gupshup, given its market-leading position, innovation-led growth and attractive financial profile.”

Sumeet Nagar, Managing Director, Malabar Investments said, “We believe that Beerud and team have the unique opportunity to expand the addressable market on the back of new offerings and scale the business up significantly, which is a perfect recipe for massive value creation. I have known Beerud for over three decades, and all of us at Malabar are delighted to partner with Gupshup in the next stage of their journey.”

Since the pandemic broke and digital transformation became the way forward for almost every type of business, Gupshup being a conversational AI platform used by top companies across segments including Government projects, BFSI, e-commerce, logistics, hospitality, retail etc. saw their business grow steadily.

In2021alone, Gupshup raised $340 million. It exited 2020 with an annual revenue run rate of approximately $150 million.

“Last year we grew almost 80 per cent in terms of both revenue and messaging volumes, and this year we expect to grow nearly the same,” Sheth said.

New offerings

Consequently, Gupshup launched several new offerings in the space over the past few weeks including solutions to digitise ordering experience for customers of restaurants, one-click bill payment solutions, and even interactive outdoor media and billboard advertising solutions.

Recently, the company announced an expansion in its executive team with leadership hires in corporate development, International Business Development, Sales, Customer Success, Marketing and IT.

Speaking of the strategy, Sheth said, “We are seeing a huge market opportunity right now. And to make the best of it and execute well, we are building and expanding the management team so that each area of the business gets the right attention and focus. It helps when the company is maturing and also when we look for an IPO. The strategy is to strengthen the management team and improve overall execution.”

Published on July 28, 2021

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