Messaging firm Gupshup raises $240 mn from existing and new investors

Conversational messaging firm Gupshup has raised an additional $240 million in follow-on funding from a clutch of investors including Fidelity Management and Research Company LLC, Tiger Global, Think Investments, Malabar Investments, Harbor Spring Capital, certain accounts managed by Neuberger Berman Investment Advisers LLC, White Oak, Neeraj Arora and others.

This funding round follows the $100 million raise from Tiger Global in April, at a $1.4 billion valuation. Gupshup's valuation remains unchanged post the current round.

Gupshup will use this investment to continue executing its vision and for secondary purchase of shares from current and former employees as well as prior investors.

The San Francisco-based firm will continue to invest in product innovation for digital commerce, as well as expanding go-to-market initiatives in mobile-first areas globally. It is also exploring mergers and acquisitions opportunities to expand its business opportunities, Gupshup said.

"Our vision is a world where it's as easy for consumers to interact with a business as it is to chat with a friend; where consumers can shop, buy, pay, book, learn, transact and interact with businesses through short, simple conversations," said Beerud Sheth, CEO and Co-founder, Gupshup.

Before April, Gupshup raised funds in 2011. It exited 2020 with annual revenue run rate of approximately $150 million, and is profitable, Sheth had said at the time of the last fundraise.

Sheth said the firm will also look at a public listing soon. "We're aiming for sometime next year, depending on market conditions. In preparation for life as a public company, we're building up our organization and management team globally, investing heavily in research and development and exploring M&A opportunities," he told Business Standard.

Among its recent notable partnerships was one with smartphone maker OnePlus in 2019, as part of which Gupshup made managing SMSes easier with classification and visualizations.  

Before Gupshup, Sheth had founded online freelancing platform Elance, which is now a listed company called Upwork.  

The company earlier announced an expansion in its executive team with leadership hires in corporate development, international business development, sales, customer success, marketing and information technology.

“We have followed Gupshup’s progress for a long while and believe that they are the most evolved customer communications platform In India and increasingly in other emerging markets, with a leadership position in the most attractive and fastest growing sub-segments of the market,” said Sumeet Nagar, Managing Director, Malabar Investments. “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,” he added.

Enabling digital commerce with conversational messaging, helps businesses across industries take their customers on artificial intelligence-powered conversational journeys on messaging apps, across marketing, commerce and support workflows. Customers can discover products, pay for them, track delivery, provide feedback and get support, while chatting with their favourite brands like they would with friends and family.

According to a report by Fortune Business Insights in April, the global enterprise A2P (application to person) SMS market size is projected to reach $64.24 billion by 2028, a growth rate of 4.6 per cent during the forecast period. As per the report, the value of the market stood at USD 44.96 billion in 2020.

Another report by MarketsandMarkets Research expects the global conversational AI market size to grow from $4.8 billion in 2020 to $13.9 billion by 2025, growth rate of 21.9 per cent.