Washington- and Hyderabad-based Zenoti, which provides cloud-based software solutions for spas, salons, and yoga studios has landed into the unicorn club after raising USD 160 million in Series D round led by American private equity firm Advent International, with participation from existing backers Tiger Global and Steadview Partners.
This makes Zenoti the country’s fifth SaaS (software-as-a-service) unicorn after Freshworks, Druva, Icertis, and Postman; and the ninth startup to achieve over USD 1 billion valuation this year. The others which made it to the coveted club include Cars24, Razorpay, Unacademy, Zerodha, Postman, Nykaa, FirstCry, and Pine Labs.
The recent funding has brought the total capital raised by the 10-year-old firm to USD 250 million.
According to the company, about 12,000 businesses across 50 countries use its mobile-first solutions for appointment scheduling, self-check-in, payments, employee management and inventory tracking, among other things.
The company plans to use the fresh funds to expand operations across European and South American markets, Sudheer Koneru, chief executive, Zenoti, told local media Mint.
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Zenoti is also reportedly looking to acquire smaller rivals to grow inorganically and ramp up customer acquisition. Over the next fiscal, the company is looking to buy two to three companies to enter new segments like physical therapy, fitness and pet spas, the Mint report said. Furthermore, the startup plans to invest in research and development of AI and smart algorithms that power its solutions.
The company, which has 70% of its workforce or close to 400 employees stationed in India, aims to double its employee count to 900 by 2022.
The funding comes on the heels of the strong growth the company witnessed as businesses adopted software solutions to operate due to the pandemic. The company claims to have grown by over 100% this year, and expects to clock 120% growth next year. According to Koneru, Zenoti may cross USD 100 million in annual recurring revenues in the next 18 months.
“The wellness industry is ripe for disruption, particularly as COVID-19 has made it more important than ever to eliminate unnecessary face-to-face interactions wherever possible,” Eric Wei, Managing Director of Advent’s technology team in Palo Alto, said in a statement. “We are seeing businesses embrace Zenoti’s technology to help pivot and strengthen their offering.”
About 60% of Zenoti’s business comes from the US market, followed by the UK which accounts for almost 20% of the company’s new bookings. Other top markets include Australia and New Zealand, while India and West Asia are still emerging markets for the company.
Koneru said as SaaS remains highly profitable business, the company expects to maintain its growth trajectory, and will look at an IPO after crossing USD 200 million in annual recurring revenues.