An interesting SaaS startup announced the twelfth unicorn startup of the year 2022
We are in the third month of the year and the twelfth unicorn startup (belonging to the domain of SaaS) has been announced. What an exciting and interesting piece of news it is!!
Let us talk about unicorn startups and the SaaS industry. Let us start with the unicorn startups. Defining what a unicorn startup is, it is a privately held entity the value of which is more than USD 1 billion. The term unicorn startups for the first time was given by Aileen Lee, who is a venture capitalist and the founder of the startup Cowboy Ventures. The reason for giving the term unicorns to such startups was because of the scarcity of the number of such startups present at that time.
Some of the basic features which are common in all unicorn startups are- they are all enabled with technology. Technology is the basis of all unicorn startups. Secondly, they bring something new to the plate. All unicorn startups bring innovation, change to the market. All unicorn startups bring a solution to the problem that is long there in the market. Such startups offer a solution to the problem which no one had looked into. All unicorn startups are privately held, thus different rounds of funding help them to grow in value.
Some of the famous unicorn startups which have indeed brought a revolution in the industry are Airbnb, which bought a change in how bookings are made. Ola bought a change in how people travel from one place to another. Nykaa is one of the very few profitable unicorns in the country. It bought a change in how the online beauty industry works. Paytm, is another unicorn that is offering its platform for payments, merchandise, and whatnot.
Let us have a discussion on the SaaS industry. SaaS stands for Software-as-a-service is a software licensing and delivery model in which license is given to the software on a subscription basis and is hosted on a central basis. SaaS is sometimes also called “on-demand software” and “Web-based/ Web-hosted software”. There are two types of SaaS offerings, Horizontal SaaS and Vertical SaaS. The horizontal SaaS puts into targets a variety of customers and does not generally consider their industry. Salesforce and Hubspot are the types of horizontal SaaS vendors. Vertical SaaS on the other hand targets a narrow variety of customers in order to meet their specific requirements.
Now if we talk about the SaaS industry of the country, the investments in this industry have increased to around USD 4.5 billion in the year 2021, which is an increase of 170% from the year 2020. The Indian SaaS industry of the country has more than 1000 SaaS startups that are working. The year 2021 saw more than 35 SaaS companies in the country having an Annual Recurring Revenue (ARR) of more than USD 20 million. This is a seven times increase within the period of five years. And out of these companies, around seven to nine companies have already reached the Annual Recurring Revenue (ARR) of USD 100 million, which is a milestone in itself.
Let us now talk about the new SaaS startup which has been declared a unicorn. Our country already has a list of unicorn startups from the SaaS industry. They are as follows- Postman, BrowserStack, Freshworks, Zenoti, ChargeBee, Mindtickle, and many others. The startup Postman has become the most valuable Indian SaaS startup at a valuation of USD 5.6 billion. This year even two SaaS startups have been declared unicorn startups.
The first one was on February 16, 2022, when Uniphore Technologies raised USD 400 million in a round of funding that was led by New Enterprise Associates, which led the value of the startup to be USD 2.5 billion. Then on February 22, 2022, Hasura raised USD 100 million in a round of funding that was led by Grrenoaks and participation was from Vertex Ventures, Nexus Venture Partners, and Strive Ventures. The value of the startup was USD 1 billion, thus marking its entry into the “Unicorn Club”.
Announcement of a new SaaS unicorn startup
The startup, CommerceIQ, has raised funds worth USD 115 million, as announced on March 21, 2022. This round of funding that has taken place was led by SoftBank Vision Fund 2. The other participants of this round of funding were Insight Partners, Trinity Ventures, Shasta Ventures, and Madrona Venture Group.
The startup has planned to use the funds raised in expanding its business in India and out of the country. The startup also plans to use some portion of the funds raised in adding more platforms and developing more tools and products. The total funds raised by the startup after this round of funding have come up to USD 175 million.
Before this round of funding, the startup had raised USD 60 million in a round of funding that had taken place in June 2021. The value of the startup after the current round of funding has come up to USD 1 billion. The startup thus has received a ticket from the Golden unicorn club. The startup is thus the twelfth unicorn startup of the year 2022.
About the newly formed SaaS unicorn startup
The SaaS startup, CommerceIQ was founded in the year 2016 by former Amazon executive Guru Hariharan and has its headquarters in Bengaluru, Karnataka. The startup is engaged in winning eCommerce at the speed of algorithms. It is the only enterprise platform for the largest brands of the world that integrate data across sales, marketing, and operations and takes into account competitive and market dynamics to turbocharge the team with automation that makes time-consuming, repetitive tasks a thing of the past.
Now if we talk about the journey of the startup, it is as follows-
2016- It started life as a Boomerang Commerce, which had a focus on prime optimization solutions for ecommerce businesses
2018- It starts developing eCommerce solutions for consumer brands looking to grow their business on Amazon
2019- It sells retail business to Lowes, focuses on decision management, and rebrands as Commerce IQ. It triples revenue year over year.
2021- It completes Series C funding which was led by Insight Partners, introduces omnichannel offerings, announces key partnerships, doubles revenue year over year, and the net retention rate increases to 150%.
More than 2000 companies trust CommerceIQ. Some of the brands are- Colgate, Duracell, Nestle, Whirlpool, Hallmark, Avery products, Georgia Pacific, Spectrum Brands, and many others. The startup is operational in India, Canada, Europe, and United States. It changes an annual subscription which is based on the business of the client and has plans to build 8-10 products on its software soon.
About SoftBank Vision Fund 2
Founded in the year 2019 by Masayoshi Son, and having its headquarters in London, England, SoftBank Vision Fund 2 is a venture capital that is a part of the SoftBank Vision Group. It is the largest technology-focused investment fund in the world with more than USD 100 billion in the capital. The total fair value of both SoftBank Vision Fund and SoftBank Vision Fund 2 as of March 31, 2022, was USD 154 billion. The value of the assets under the management of the SoftBank Vision Fund is more than USD 154 million.
The portfolio of SoftBank Vision Fund consists of companies like Swiggy, Rappi, Flipkart, Lenskart, DiDi, DoorDash, PolicyBazaar, Cruise, Mapbox, OurCrowd, Oyo Rooms, Slack, Cruise, eToro, C2FO, Arm Ltd, ByteDance, Uber, and many others.
About Insight Partners
Founded in the year 1995 by Jeff Horing and Jerry Murdock, and has its headquarters in New York, United States of America, Insight Partners is a venture capital and a private equity firm. The target industries of Insight Partners are growth-stage technology, software, and internet businesses. It has more than 150 employees and has more than USD 90 million worth of Assets under Management.
About Trinity Ventures
Founded in the year 1986 by Noel Fenton and having its headquarters in Menlo Park, California, United States of America, Trinity Ventures is of the belief that winning takes heart. It is engaged in relentlessly pursuing the vision. It makes investments in mission-driven entrepreneurs, not just their companies. Together, they turn ambitions into reality.
The portfolio of Trinity Ventures consists of companies like BirdEye, Turo, First up, VTS, Uplift, Way up, CommerceIQ, LifeHouse, Alice, Gatsby, Kite, Weights & Biases, Datawire, Genies, Caliber, New Engen, Cyrus Biotechnology, and many others.
About Shasta Ventures
Founded in the year 2004 by Rob Coneybeer and Ravi Mohan, and having its headquarters in Menlo Park, California, United States of America, Shasta Ventures is early-stage venture capital. The target of Shasta Ventures is enterprise and technology consumer startups. It has its focus on investing in early-stage startups.
The portfolio of Shasta Ventures consists of companies like Leanplum, Anaplan, Airspace Systems, Glint, Aviso, Aquera, Private AI, Layer1, Leaftail Labs, iConclude, Zwift, ZEFR, Turn, Tonal, ISARA, Tally, The Farmer’s Dog, Simple, Entelo, and many others.
About Madrona Venture Group
Founded in the year 1995 by Tom Alberg, William Ruckelshaus, and Gerald Grinstein, and having its headquarters in Seattle, Washington, United States, Madrona Venture Group is a venture capital firm that has a specialization in seed, startup, Series A, and early-stage investments.
The portfolio of Madrona Venture Group consists of The Riveter, Rover.com, Smartsheet, Eclypsium, and many others.
The startup is undoubtedly offering something very new and different. We wish the startup a stroke of good luck and hope it has a bright and prosperous future ahead!