Gurgaon-based investment and advisory firm Moonbeam Capital Managers Pvt Ltd, which recently acquired another city-based early stage fund New Growth Capital, has invested in PK4 Software Technologies Pvt Ltd, a Bangalore-based SaaS (software as a service) vendor.
Moonbeam Capital Managers has taken up a minority stake for an undisclosed amount. The flagship service by PK4 Software Technologies Pvt Ltd, Impel CRM, competes with the global leaders in cloud-hosted customer relationship management SalesForce.com and Sage CRM Solutions. Founded in 2005 by Narasimhan (Kishore) Mandyam and Surekha Shetty, PK4 Software Technologies Pvt Ltd began as an applications development firm with Zerocode, an application development framework, and dabbled in various software areas including Facebook applications such as Funny Farm and Freeshare, groupware server Chorus and multi-database reporting portal vInfostore but finally zeroed in on the cloud-based CRM market to launch Impel CRM in July 2008.
Over the past two years, the company has registered 68 clients and 2000 users, including sanity-ware major Hindware and Chennai-based stem cell bank Lifecell.
CRM For The Rest
Surekha Shetty, Vice President of Marketing and Sales, PK4 Software Technologies Pvt Ltd told VCCircle the service is being positioned as "CRM for the rest", as opposed to "CRM for the West". The company faces heated competition in the form of SaaS first mover Salesforce and Sage CRM, and is betting on more than just aggressive pricing - it is also adding value added features such as rich dealer management and integration of SMS marketing campaigns to attract clients. Its partnership with online classifieds service JustDial is another feature for SMEs and merchants who use JustDial for lead generation.
Salesforce, according to Shetty, has made it easier to be a SaaS CRM service in India. "Salesforce has recently increased focused on building awareness in India about SaaS and we have tagged onto them," she said.
With the funds, PK4 Software Technologies Pvt Ltd will shift from relying primarily on online sales to offline. "So far, we have been growing our business online. In the last month, we started feet on the street to expand SaaS awareness. Nearly 85% of people in India are not looking for a SaaS CRM solution on the Internet - they are relying on word of mouth," said Shetty. The firm will add seven sales personnel spread across Chennai, Hyderabad and also target Tier 2 towns. The company has also seen interest from SMEs in all corners of the world - Kenya, Middle East, Poland, South Africa, Uganda, Sri Lanka, Mauritius, Indonesia and Malaysia and aims to use the funds to push global sales.
This is the first investment by Moonbeam Capital Managers in the IT domain. "IT is an area we are interested in. Technology is a key competitive advantage that businesses can leverage. PK4's cloud-based, on-demand model and pricing structure are key differentiators. It has gained a strong position in the Indian SMB market and is positioned to be a dominant player," said Gaurav Gulati, CEO, Moonbeam Capital Managers Pvt Ltd, speaking to VCCircle.
Moonbeam Capital Managers Pvt Ltd typically invests between Rs 50 lakh and Rs 2 crore in early stage ventures focussed on HNIs and luxury brands space. In the past three years, the portfolio companies it has invested in include LuxuryHues, a Gurgaon-based consultancy for international luxury brands, Bangalore-based wine manufacturer Mandala Valley, as well as , Scion, Luxury Marketing Council, Estee Advisors Pvt Ltd, Altamount Capital Management and the Quintessentially group.
Synergies With Portfolio Firms
It believes there are inherent synergies between other portfolio companies and PK4 investment. Gulati said, "Our focus is on customer segment, which needs to be tracked carefully in HNI and luxury brand sectors where the differentiator lies in managing customers. Having a CRM product that is designed to be palatable to salesforce is critical."
“Kishore and his team have years of multi market experience and know what differentiated service is all about. We have been looking for a standardized solution that could deliver customized solutions to the HNI services segment. This investment allows us to make an entry in to a scalable and lucrative CRM technology arena while also getting a differentiated solution for HNI services which is what our investee firms are looking for," added Muralidhara Kadaba, CMD, Moonbeam Capital Managers Pvt Ltd.
With the acquisition of New Growth Capital earlier this month, Moonbeam Capital added micro and small growth stage companies to its portfolio of early-stage companies. It is set to invest in luxury residential real-estate. Several announcements are in the pipeline and the size of the India fund will also be announced soon, said Gulati.