Conversational messaging platform Gupshup on Wednesday said it has raised $240 million from Tiger Global Management and others to buy back shares ahead of a possible IPO next year, Reuters reported.
Powering over 6 billion messages per month, the messaging platform provides its application programming interface to businesses for customer engagement across more than 30 communication channels, especially SMS.
Speaking about the buy back, Gupshup co-founder and Chief Executive Officer Beerud Sheth said, “We want to build relationships with these large investors because they can help us in a future IPO and for our growth. But … taking too much money can be dilutive”.
While venture capital investments are traditionally used for hiring more engineers or expanding sales and marketing, buy-back deals allow investors in a startup to realize their investment before an IPO. The buy-back will also allow employees to cash out, a challenge for many startups as delayed IPOs have kept many founders and employees rich only on paper, the report said.
Gupshup became the 10th startup to join the unicorn club this year after it raised $100 million in funding from Tiger Global Management in April, propelling its valuation by ten-folds to $1.4 billion. This latest round follows years of profitable growth, product innovation, and customer adoption.
The company has raised USD 150 million in funding to date from investors like Helion Venture Partners and Globespan Capital among others. Its last fundraising was in 2011 when the company had received USD 10 million. Since then, the company has grown rapidly, exiting 2020 with an annual revenue run rate of about USD 150 million.
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The company offers a comprehensive suite of solutions including messaging APIs, bot platform, bot building tools, scripting engine, omnichannel inbox, conversational AI, and client-side software. Its API enables over one lakh developers and businesses to build messaging and conversational experiences delivering over 6 billion messages per month across over 30 messaging channels.