MoEngage, a customer engagement platform that serves consumer brands in 75 countries, is back under investor attention with $180 million in a new Series F follow-up round. This is barely a month after the company raised $100 million, which is a clear indication of how much confidence investors have in the progress of the firm. Most of this most recent financing round was modelled as liquidity to investors and workers in the form of secondary transactions, although a substantial share also flowed directly into the company.
Among the $180 million funds that were raised, there was approximately $123 billion in secondary capital. This covered a $15 million employee tender, which allowed liquidity to 259 current and former employees. The rest of the capital was raised as primary capital, amounting to $57 million, which was going to be used to expand the business. ChrysCapital and Dragon Funds were the lead round, followed by Schroders Capital and existing investor TR Capital and B Capital. The early investors, including Eight Roads Ventures, Helion Venture Partners, Z47, and Ventureast, sold their stake in the secondary deals, which was a considerable redefinition of the investor profile of the company.
The transaction was worth above $900 million post-fund, according to an individual familiar with the deal. The same source reported that the startup is projected to reach $100 million in annualized recurring revenue this year, but these amounts were not reported by MoEngage itself. Such valuation is an indication of the high market position of the company and the capacity of the company to generate several investor interests late into the life of the company.
MoEngage will invest the new capital into its Merlin AI framework, increasing its application of AI agents to improve the efficacy and decision-making of marketing teams. According to the co-founder and chief executive, Raviteja Dodda, the company is also intensifying its product and engineering team expansion by adding analytics and transactional messaging capabilities to a wider product offering. The strategy will grow the average contract values and will grow the addressable market of this company.
In addition to product development, MoEngage will also engage in strategic acquisitions, especially in the U.S and Europe. The software companies are aimed at enhancing their customer interaction platform, and the software companies in these regions will expand their growth in these markets. In an effort to increase its competitive advantage in the global marketplace, MoEngage is targeting miniature AI workgroups to enhance its intelligence-based products.
MoEngage was established 11 years ago and has its headquarters in Bengaluru and San Francisco. Its revenue spread indicates its spread across the world: over 30% is distributed across North America, approximately 25% across Europe and the Middle East, and the remaining 45% across India and the Southeast Asian market. Such a diverse footprint places the company at an advantage to take advantage of growth prospects in various regions.
The raise is of the secondary-heavy type, which is indicative of the late-stage maturity of MoEngage. The company is not subject to the pressure of having an imminent public listing, as it enables early investors and employees to get liquidity. Such a structure allows MoEngage the level of flexibility to focus on business objectives instead of investor exit time frames and make strategic decisions that are consistent with long-term expansion and not short-term financial constraints.
MoEngage anticipates entering profitability in EBITDA in this quarter, which is an indicator of financial discipline and expansion. The secondary element of the round also helped some of the early investors with full exits. Ventureast, the investor in MoEngage in 2018, made an approximate 10-fold investment in it on a blended basis, as per partner Vinay Rao. Rao pointed to the fact that the India-based cost structure of MoEngage has helped the company compete more efficiently in the U.S market, where numerous other international customer engagement firms have higher cost structures.
To date, MoEngage has a primary fund amount of approximately $307 million with its most recent round. Strong market positioning and operational maturity of the company are determined by the ability of the company to raise back-to-back funding rounds, attract international investors and liquidity of stakeholders. Currently, being a company that invests in AI-powered innovation, global expansion, and strategic acquisitions, MoEngage is destined to position itself as one of the top customer engagement platforms. The profitability goals, expansion aspirations and investor trust indicate that MoEngage is in its critical stage of becoming a force to reckon with in the world of customer engagement technology.