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Tag: B Capital

  • Weeks after raising $100M, investors pump another $180M into hot Indian startup MoEngage | TechCrunch

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    MoEngage, a customer engagement platform used by consumer brands across 75 countries, has announced a $180 million Series F follow-on transaction just over a month after securing $100 million, with a majority of the latest funding providing liquidity to investors and employees through secondary transactions.

    In the latest raise, about $123 million was secondary, including a $15 million employee tender that provided liquidity to 259 current and former employees, while the remaining $57 million was raised as primary capital and went into the business. The round was led by ChrysCapital and Dragon Funds, with participation from Schroders Capital and existing investors TR Capital and B Capital. Early backers, including Eight Roads Ventures, Helion Venture Partners, Z47, and Ventureast, sold shares in the secondary transactions.

    The deal valued MoEngage at “well over” $900 million post-money, per a person close to the deal, who added that the startup was tracking toward $100 million in annualised recurring revenue this year. MoEngage did not disclose these figures.

    MoEngage plans to use the fresh capital to invest further in its Merlin AI suite and expand its use of AI agents to improve decision-making and efficiency for marketing teams, said Raviteja Dodda (pictured above), co-founder and chief executive, in an interview. The startup is also pushing deeper into product and engineering teams by bundling its analytics and transactional messaging tools into a broader offering, a move it expects to lift average contract values and expand its addressable market.

    “When you look at customer engagement, it is not necessarily focused on marketing teams. There are product and engineering teams, which also focus on how to make sense of customer behavior and data,” Dodda said.

    MoEngage also plans to use part of its fresh capital raise to pursue strategic acquisitions, particularly in the U.S. and Europe, targeting software companies that complement its customer engagement platform or help accelerate its expansion in those markets. It also targets small AI teams to bolster its intelligence-led offerings.

    The 11-year-old startup, which has its headquarters in Bengaluru and San Francisco, already gets more than 30% of its revenue from North America, about 25% from Europe and the Middle East, and the remaining 45% from India and Southeast Asia.

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    MoEngage’s secondary-heavy structure of the raise reflects its late-stage position, allowing early investors and employees to take liquidity without forcing the company into a near-term public listing. This approach gives MoEngage flexibility to choose its next steps based on business priorities rather than investor exit timelines.

    “It gives us the opportunity not to have an urgency with regard to going IPO,” Dodda said, adding that the startup still aims to go public in a couple of years, depending on market conditions and other factors.

    MoEngage expects to turn earnings before interest, taxes, depreciation, and amortisation (EBITDA) positive this quarter and is targeting compound annual growth of about 35% over the next three years, Dodda said.

    Bhavin Turakhia, co-founder and chief executive of fintech firm Zeta, a MoEngage customer, said the startup’s analytics and messaging tools have helped it improve onboarding, activation, and cross-sell across key customer journeys.

    The secondary component of the round also enabled some early investors to exit fully. Ventureast, which backed MoEngage in 2018, is one of them. The VC firm recorded a roughly 10-times return on its investment on a blended basis, its partner Vinay Rao told TechCrunch.

    Rao said that while many global customer engagement companies operate with cost structures geared toward the U.S. market, MoEngage has retained an India-based cost structure, which he said has helped it compete more effectively in the U.S. while scaling the business.

    With the latest round, MoEngage has raised about $307 million in primary funding to date. Avendus advised MoEngage for the transaction.

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    Jagmeet Singh

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  • Deal Doldrums: An Era of Inflated Valuations is Over – Los Angeles Business Journal

    Deal Doldrums: An Era of Inflated Valuations is Over – Los Angeles Business Journal

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    In speaking with venture capital leaders in the Los Angeles scene, many described the past several years of investing as “irrational exuberance,” a period marked by eye-watering company valuations and growth funds propelling multiple firms into the billion-dollar club.

    Now, as 22-year-high interest rates hamper capital deployment and fundraising, venture capital must face the realities of a low-liquidity market and answer to a crop of investors who may be experiencing a downturn in the venture world for the first time.

    According to Pitchbook’s venture capital data from last year, deal activity slumped from the peak seen in 2021. Just $171 billion was invested into companies, roughly half the amount invested two years prior. Tightened purse strings reflect a shortage of capital availability spurred in part by the public-offering and acquisition markets grinding to a near halt.

    “When you don’t have exits coming fast and furious, then the entire market seizes up because there’s no capital funds to refresh the venture capital partners,” said Anna Barber, a partner at VC firm M13. 

    Last year’s initial public offering market did see some high-profile venture-backed debuts, including ARM and Instacart, but the jump-start was a stark reminder of just how inflated the venture world’s valuations could be. Instacart’s almost $10 billion September entry on the New York Stock Exchange was a fraction of the $39 billion it was worth in 2021– a price tag backed by some of the leading names in venture capital, including Andreessen Horowitz and Sequoia Capital.

    Gabe Greenbaum (David Sprague/LABJ)

    Barber is among the venture capitalists who see the current capital markets as back to business as usual, and an opportunity for limited partners to see which firms can gauge the companies with cycle-resilient business models. 

    M13, a Santa Monica-based firm with $685 million in capital, has a majority of its team on portfolio companies’ operations. Even as the firm reserves at least half of its capital for follow-on investments to existing companies, M13 is focusing its efforts on helping companies build two to three years of runway.

    “I think that’s been really valuable and meaningful in a challenging market where every company is trying to make their dollars go longer, being able to go further, being able to leverage support,” Barber said.

    Fundraising standout

    The other side of venture capital, courting limited partners, has proven difficult in current capital markets.

    In looking at the Business Journal’s top venture capital firms from last year and 2022, billion-dollar entities like Century City-based Vida Ventures and Santa Monica-based Ominent Capital did not raise any additional capital last year. 

    Pitchbook’s venture data shows that last year saw the lowest level of fundraising since 2017, with just $66.9 billion committed to venture capital funds globally, compared to the record-high $173 billion committed in 2022.

    However, there was one local venture capital firm that worked opposite of the market downturn. Manhattan Beach-based B Capital broke its previous fundraising record and became the top local venture capital firm after raising a total of $2.6 billion last year.

    Its third growth fund made up the lion’s share of this capital, with $2.1 billion committed from limited partners such as pensions, endowments and family offices. In June, Bloomberg reported B Capital was in talks to raise a $500 million for a new early-stage venture to follow its previous Ascent Fund, which raised $126 million over two years ago.

    For Gabe Greenbaum, a general partner at B Capital, having investors double-down on commitments during a market downturn serves to validate the firm’s expertise and strategy on artificial intelligence, fintech and health care.

    “You really need to understand multiples in the market both publicly and what private comps trade at to really ensure that your entry point in many of these companies is right-sized,” Greenbaum said. “I think the market has brought that into focus for every venture fund.”

    The firm, founded in 2015 by Facebook co-founder Eduardo Saverin and Bain Capital alum Raj Ganguly, is unique in its partnership with the Boston Consulting Group, which serves as a corporate merger and acquisition advisor able to support companies in their operations as well as go-to-market partnerships.

    One such company was Gameplanner.AI, which last November became Airbnb’s first acquisition since the vacation rental company went public in a deal CNBC reported was worth around $200 million. According to Greenbaum, B Capital was the only institutional investor in GamePlanner, which is set to develop additional AI tools for Airbnb.

    According to its portfolio page, B Capital currently has a stake in 122 companies, and Greenbaum says the firm is deploying additional capital.

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    James Brock

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