Palo Alto-based ThoughtSpot, an AI-driven analytics firm led by Nutanix co-founder Ajeet Singh, wanted to raise only $70 million (Rs 471 crore) but ended up with more than double that sum at $145 million (Rs 975 crore). The amount eventually helped the company, with a Bengaluru R&D centre, put itself among a raft of Indian-led unicorns based in the Silicon Valley, with a value of over $1 billion (Rs 6,727 crore).
The startup now says it will use the funds to expand its Bengaluru centre from 20 to 100 employees in the next 12 months. It has invested over $10 million in the India facility already. "We are looking to beef up our technology," Singh said, adding that the company will use the money for market expansion in the Asia-Pacific.
Interestingly, most of the funding in the round came from existing investors, who had so much faith in the company that there remained hardly any room for new investors, ThoughtSpot co-founder and chief executive Singh told TechCircle. The new funding round was led by existing investors Lightspeed Ventures, Future Fund, Khosla Ventures, and General Catalyst. This took the total funds raised by ThoughtSpot to $306 million. New investors were Sapphire Ventures and a few other institutions the firm did not name.
"Our existing investors were so bullish that they took the round to double that of our target; there was not much room left for new investors. Now this funding will take us till initial public offering (IPO) and even beyond. We grew our revenue by 180% quarter after quarter in the fourth quarter," Singh said, without specifying the time for IPO rollout.
Going by the funding, investors seem happy to write cheques for AI-driven analytics. For example, Rubrik, a one-stop-shop for business data, became a $1.3 billion company after a $180-million round led by Institutional Venture Partners in April 2017.
ThoughtSpot, whose investors are similarly bullish, says it has simplified data analytics for all employees in a company, something which was understood by a few technologists in a firm.
“Because of the founders' experience, we think like a consumer company,” Singh said, adding that it makes accessing and personalisation by non-technical persons in an organisation a cakewalk. "Our competitors are mostly using outdated technologies," Singh added.
ThoughtSpot's main competitors include Tableau and Power BI in a data analytics market that is estimated to be around $200 billion by consultancies and research institutions.
Singh said that the company works with three of the top five firms globally and signs mostly large long-term deals, giving the startup visibility of revenue over a long period.
“ThoughtSpot has changed the enterprise data analytics game by allowing companies to understand and interact with their data like never before through their search and AI-driven analytics platform,” said Jai Das, managing director at Sapphire Ventures.
"This large fundraising is usual for enterprise companies and is not because of a lack of profitability. Our unit economics is strong," Singh said, adding that a lot of startups continue to post losses even after IPO.
ThoughtSpot boasts clients like Amway, Bed Bath & Beyond, Capital One, Chevron, Haggar Clothing Co., OpenTable, Sterling National Bank, and ServiceNow. More than 80% of customers sign six-figure deals, the company said. It has offices in Seattle and London, among other cities.
ThoughtSpot was founded in 2012 by Abhishek Rai, chief executive Singh, Priyendra Deshwai, Amit Prakash, Shashank Gupta, Sanjay Agrawal and Vijay Ganesan. The founders have previously worked at consumer companies like Google, Amazon, and Facebook. The company employs 275 people across the globe.
ThoughtSpot is one of the many Indian-led startups to have made it big in Silicon Valley in recent years.
For example, enterprise cloud infrastructure firm Nutanix, which went for IPO in 2016, was also co-founded by Singh. The firm was also founded by Indian-origin entrepreneurs Dheeraj Pandey and Mohit Aron. Nutanix exceeded market expectations during its Nasdaq debut in September 2016 to hit a $5 billion valuation. Long starved for a sizzling tech IPO, investors lapped up Nutanix shares.
Another Indian-led cloud security startup to break into Silicon Valley’s unicorn club is Netskope, launched by Sanjay Beri in 2012 along with Ravi Ithal, Lebin Cheng and Krishna Narayanaswamy.
In August 2017, US-based technology firm Cisco Systems Inc. said it planned to acquire hyper-convergence firm Springpath, which was founded by former VMware executives Mallik Mahalingam and Krishna Yadappanavar in 2012. The startup was based in Sunnyvale, California.
Then, in January 2017, Cisco agreed to buy San Francisco-based AppDynamics Inc., an application intelligence software firm, for nearly $3.7 billion.