The round catapults Zenoti, based in Bellevue, Washington and Hyderabad, into the coveted Unicorn club, making it only the fifth software company of Indian origin, after Freshworks, Druva, Icertis and Postman, to do so. It also brings the total amount of company capital raised to $ 250 million so far.
Zenoti said its software has more than 12,000 companies in 50 countries, offering mobile solutions for scheduling, auto-check-in, payments, employee management and even inventory tracking. The company said it experienced strong growth in 2020, driven by companies modernizing their software during the Covid-19 pandemic.
“We have a very good traction in the USA. This year we have grown by over 100% and we believe that next year we are about to grow by at least 100%. Our real commitment to the board is something like 120% growth for next year, ”said Sudheer Koneru, founder and CEO of Zenoti, without commenting on the company’s revenue.
According to people watching the company’s financial situation, Zenoti was around $ 35 million in annual recurring revenue (ARR) at the end of 2019. Koneru said Zenoti is on track to break the $ 100 million threshold. ARR dollars over the next 18 months, with “burning quite small at about $ 1 million a month.”
Zenoti said it will use fresh capital to continue operations and invest in innovation research and development using AI and smart algorithms that will help its customers better manage inventory, plan customers, market and to set dynamic prices. He also said that the funds will be used for inorganic growth through acquisitions.
“We felt that we could use the money for research and development, entering new verticals (pet spas, group classes) and also for M&A purposes. We see a lot of players fighting right now and getting worse, so maybe there will be a consolidation of the industry and we will be in the driver’s seat “, added Koneru.
He added that the investment thesis of Advent revolves around Zenoti, which will be published in the next few years. Although he did not disclose a specific timeline, Koneru said he would start looking at an IPO when the company gets about $ 200 million in ARR, giving it significant scale and market influence.
“The wellness industry is ready for disruptions, especially as Covid-19 has made it more important than ever to eliminate unnecessary face-to-face interactions whenever possible,” said Eric Wei, general manager of the Advent technology team in Palo Alto. .
The US market leads 60% of Zenoti’s business, followed by the UK, which accounts for almost 20% of the company’s new bookings, with Australia and New Zealand in third place. In India and West Asia, while some of the largest salon and spa chains use Zenoti software for new bookings, they lag behind Western markets.
Zenoti’s rise to become a $ 1 billion SaaS company along with a few others before it was a great analogy to inspire more entrepreneurs to start building software companies, according to Accel partner Shekhar Kirani, who was an early supporter of Zenoti. For him, India can become for SaaS what IT services did two decades ago.
“Now there is a product mentality and the way the ecosystem has come together and pays it forward is something you will not see in any other sector in India. Every founder wants to help another founder, this is not achieved in the consumer sector “, said Kirani. “Customers around the world have changed, too. They don’t care where a product is built, as long as it’s good. ”