Managing brands the Capillary way: Page 2 of 2
By Yunnie Marzuki February 7, 2018
Journey in Indonesia
Capillary began its journey in Indonesia at the end of 2016 and Abhijeet admits that they did not do a lot of marketing but they were referred by clients and consumers.
“Our growth here is based on references, and we are proud of it. Now, we want to prioritise the market in Indonesia. Indonesia has very unique problems that we can solve.”
Indonesia is a value-conscious market similar to India and China, and it also a very socially engaged and digital-first market.
“We see that things are happening in Indonesia, looking at how local startups such as Gojek, Traveloka, and Tokopedia are innovating. The phenomena of building solutions to solve problems is happening.”
Abhijeet feels that clients in India and China are very templatised while Indonesian are relationship-driven.
“It’s the market where we need to trust each other. You don’t just buy the product because of the name, but also look at the company and whether they understand you.”
He sees good tractions in Indonesia as it has become a million-dollar market for Capillary.
“It’s the fastest growing among all the markets we operate in. We feel very excited about this market and would like to invest and expand more in this country.”
Despite the tremendous growth, Capillary faces some issues in terms of ease of doing business, infrastructure and logistics that need to improve, hiring and building a local talent pool.
“But our approach has been to embrace the culture, understand and work on the challenges encountered and become local to the market. We have done this in India, China and the Middle East in past and are replicating our learning here in Indonesia too.”
Abhijeet says Indonesia is a large market that is rapidly evolving every day. Whether it is the number of internet users, e-commerce revenue or the number of businesses going digital, it's all growing northwards which offers Capillary a great opportunity as a company.
“So, I would say, being a new market for us, Indonesia offers more opportunities to us than it throws out challenges.”
Capillary has a team of engineers and business development staff with 10 people in Indonesia. They plan to add up to 25 people in the next four to five months.
Growth as corporate-level company
As a corporate-level company, Capillary has 10 offices globally, with of 820 employees.
“We grow really fast. Our long-term vision is to become a a billion-dollar software company by 2025 and to get there we need to work well in markets such as Indonesia, India, and China.”
Abhijeet says that Capillary has the demand from clients and users which helps to boost their growth.
“Our growth strategy is delivering new products every month and expanding to new markets. We want to be sure that our clients know and have evaluated us, so it will be our growth metrics.”
He says that Capillary’s competitors are everyone and anyone in the industry.
“When talking about our product line, this covers a wide area. You may find somebody who just does data analytics, or marketing, or only e-commerce, or only loyalty programmes.
“There are a lot of companies who are doing bits and pieces of these. We haven’t found any company that is doing things in our way which is end-to-end.”
When asked if their business model has changed over the past 10 years, Abhijeet says, “There is no change in business model. We offer SaaS where clients pay as they grow and we have maintained it from day one since we started this business. We are sure that the technology that we have is buildable.”
He thinks that utilising big data and Artificial Intelligence (AI) are important and they have become big pillars for Capillary.
“Big data for us is a big pillar of investment. We are an IT product company, and we build technology and for us to stay relevant, we need to come out with new products every year, and products around big data need to be there.
“And when we learn from the data we get, that’s when machine learning kicks in. You have to learn fast and start predicting the future.”
One example is the usage of data in someone’s interaction on an online platform. “We use this data in a targeted manner, and interact with them as a brand.”
Aims for exits
Capillary has raised four rounds of funding backed by Warburg Pincus, Sequoia Capital, Qualcomm Ventures, Norwest Venture Partners, and American Express Ventures.
In September 2012, Capillary raised US$15.5 million (RM60.4 million) from Sequoia Capital, Norwest Venture Partners and Qualcomm. This was followed by US$4 million (RM15.59 million) in February 2014 from American Express.
Capillary then raised Series C funding amounting to US$45 million (RM175.34 million) in September 2015 from Warburg Pincus, Sequoia Capital and Norwest Venture Partners. A year later, they raised US$3 million (RM11.69 million) in debt financing.
“The small debt amount was meant to boost our working capital in the interim in order to kick-start investments in areas of higher growth without losing any time.
“It was a more cost-effective option to finance the gears of a fast-growing company like ours, we opted for it,” explains Abhijeet.
He says that Capillary is not aggressively looking for funding now but is seeking to give good exits.
“An IPO could be one of the ways, but we are focusing more on our markets.”