PE giants locked in a race to invest in SaaS startup CRMNEXT

NEW DELHI|BENGALURU: Private equity giants Warburg Pincus, TA Associates and Accel-KKR are in the race to invest in Noida-based software-as-a-service ( SaaS) venture CRMNEXT, according to three people aware of the developments.

The discussions are at an exploratory stage but if a deal is struck, the 13-year-old company could potentially raise $40-45 million at a valuation of $140-150 million, they said. It would be the first equity financing raised by the company, which competes with Salesforce, Microsoft and Oracle, since it raised about $7 million from Norwest Venture Partners in 2014.

Homegrown risk-capital investor Multiples Alternate Asset Management is also a potential investor, these people said, declining to be identified. It is unclear if Norwest, which owns 25-30% of CRMNEXT, will participate in the anticipated capital-raising. CRMNEXT, owned and operated by Acidaes Solutions, is in the process of ramping up its team in the United States, where it began operations last year, and considering entering Europe and Australia over the next 18-24 months.


Nishant Singh, CEO of CRMNEXT, declined to comment. "We always see a strong inbound interest from global investors. However, as a rule we don't comment on market speculations," he told ET. A spokesperson for Warburg Pincus said in an email reply that "the firm is unable to share views on deal-related queries". Dhiraj Poddar, country head for TA, also declined to comment. Norwest executive director Mohan Kumar said the firm does not "comment on the fund-raising activities of our portfolio companies".

Accel-KKR, the technology-focused firm founded as a joint venture by the two marquee investment firms, and Renuka Ramnath-founded Multiples, did not respond to queries.

"CRMNEXT is one of the few deep (intellectual property) plays to have come out of Asia. The company is in no hurry to raise capital given that it has always been profitable," one of the people mentioned above said on condition of anonymity. For the financial year ended March 31, 2016, the company, which has operations also in Indonesia, the Philippines and the Middle East, re ported revenue of Rs 47.8 crore and net profit of Rs 2.9 crore.

Founded by Singh, Manoj Kumar and Bidhan Chowdhary, the company's flagship product, CRMNEXT, offers clients sales and service automation, operations management, digital applications and reporting analytics. It carters to companies in the banking, financial services, insurance, retail, pharmaceutical, media and telecom industries.

CRMNEXT counts domestic lenders SBI, HDFC Bank and ICICI Bank as well as Islamic Bank of Abu Dhabi as part of its roster of clients.

India’s broader enterprise and SaaS sector has continued to see participation from risk-capital investors. In November, Freshworks, previously known as Freshdesk, raised $55 million in funding led by Sequoia Capital India, along with existing investor Accel Partners.

In July, ET reported that Newgen Software Technologies was preparing to make its public market debut with an expected issue size of about Rs 500 crore.