Gupshup Raises $100M at $1.4B Valuation - Conversational Messaging

Gupshup Achieves Unicorn Status and Profitability

A company originating in India fifteen years ago, initially focused on facilitating business-to-user communication via text messaging, announced on Thursday its attainment of unicorn status, alongside confirmed profitability.

Gupshup, now headquartered in San Francisco, has secured $100 million in Series F funding led by Tiger Global Management. This investment has valued the fifteen-year-old organization at $1.4 billion.

Conversational Messaging Platform

The company provides a conversational messaging platform utilized by over 100,000 businesses and developers. These entities leverage the platform to create customized messaging and conversational experiences for their user base and clientele.

Having raised a total of $150 million in funding – with its Series E round concluding in 2011 – Gupshup reports that its clients dispatch over 6 billion messages each month.

“The increasing adoption of messaging and conversational experiences within businesses, fundamentally changing how customers are engaged, represents a significant and ongoing trend,” stated John Curtius, a partner at Tiger Global Management. “Gupshup is exceptionally well-positioned to succeed in this market, possessing a unique product, a robust competitive advantage, and a seasoned team with a history of success. The company’s leadership position, combined with its scale, growth, and profitability, were key factors in our investment decision.”

From Consumer Messaging to Enterprise Solutions

Many users in India fondly recall Gupshup for its earlier iteration. For its first six years, the service was primarily known for enabling users to send group texts to their contacts. This service allowed millions of Indians to remain connected via mobile phones.

However, this initial business model proved unsustainable, according to Beerud Sheth, co-founder and CEO of Gupshup, as revealed in a TechCrunch interview.

“Maintaining that service required Gupshup to subsidize message costs, covering expenses billed by mobile operators. The initial plan involved introducing advertisements within the messages once sufficient scale was achieved. Ultimately, operator pricing remained high, and regulatory restrictions prevented the inclusion of advertisements,” he explained.

This led to a strategic pivot for Gupshup. “We were unable to continue subsidizing messages, nor could we monetize our user base effectively. However, we had developed advanced technology for high-throughput messaging. Consequently, we transitioned from a consumer-focused model to an enterprise-centric approach, serving organizations like banks, e-commerce companies, and airlines that require reliable, high-volume messaging and are willing to pay for the service,” said Sheth, who also co-founded Elance in 1998.

Expanding Messaging Channels and Client Base

Over time, Gupshup has broadened its capabilities to encompass newer messaging channels, including conversational bots. The platform also assists businesses in establishing and managing their WhatsApp channels for customer engagement.

Sheth indicated that numerous prominent global firms across sectors such as banking, e-commerce, travel, and hospitality are clients of Gupshup. These companies utilize Gupshup to deliver crucial information like transaction details and authentication codes to their customers. “These messages are primarily informational and service-related, rather than promotional in nature,” he clarified.

Future Growth and Investment

With an annual run rate of $150 million, the newly acquired capital will be used to expand the product portfolio and pursue clients in additional markets. Sheth noted that a similar pattern observed with businesses in India a decade ago is now emerging in numerous developing markets, presenting a growth opportunity for the business messaging platform.

“Gupshup’s core mission is to empower businesses with the tools necessary to enhance customer engagement through mobile messaging and conversational experiences. We are pleased to receive this investment from Tiger Global, given their impressive history of supporting innovative, category-leading companies globally,” he concluded.