Social CRM Company Capillary Technologies Raises $15.5M From Sequoia, Norwest & Qualcomm

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Capillary Technologies, a social CRM company that helps retailers engage over mobile, email, social and in-store channels, is announcing the close of $15.5 million in Series A funding led by Sequoia Capital and Norwest Venture Partners with Qualcomm Ventures also participating in the round. The company, which offers a cloud-based SaaS platform for customer engagement, clienteling, loyalty and social CRM solutions, currently works with over 100 major brands across 10,000 locations worldwide, and just recently entered the U.S. market.

Current customers include Pizza Hut, Puma, Robinson’s, United Colors of Benetton, Mothercare, Store21, Sunglass Hut and Nike.

“Trying to engage with customers is a difficult thing,” explains co-founder Krishna Mehra (President – Americas), who founded the company alongside CEO Aneesh Reddy and VP of Operations Ajay Modani. “The existing mechanisms to capture customer data and interact with customers through plastic cards, and all these things, are very sub-optimal. Most systems, even punch cards, don’t really capture a lot of quality customer data. That’s something we solve very well.”

What makes the system a big draw for brands, he explains, is its ability to integrate with hundreds of different point-of-sale systems, as well as the software’s real-time nature which is able to identify customers immediately after sign-up – often while they’re still in the store. “[Real-time is] the big differentiator we have from most other social CRM solutions – it’s very deeply linked into the CRM,” says Mehra.

Here’s how that works. A customer enters the store and signs up using their phone by scanning a QR code that’s on display. They’re then taken to a page to sign-up to receive messages from the brand, and that page uses Facebook Connect to quickly pre-fill the customer’s information while also sharing customer data back with the brand. The moment the sign-up process is complete, the cashier at the point-of-sale immediately sees the customer’s picture on an intelligent app integrated into their system. Before or after the customer’s transaction, the brand can send out offers and recommendations to the consumer’s device.

For example, a customer might immediately be recommended to buy the shoes that match the dress after checking out, with the merchant telling them they’ll be given a discount if they do so now. The ability to immediately upsell like this is one of the things that makes what Capillary offers so powerful. According to Mehra, the increase in same-store sales by retailers can be as high as 10%, but generally falls in the 5-7% range. On a yearly basis, Capillary sees around $1-1.5 billion in transactions coming through its system from 50 million consumers in the U.K., India,  Southeast Asia, the Middle East, Africa, and now, the U.S. Stateside, the company just opened offices in Palo Alto, Calif.

With the additional funding, the company will be focused on its growing U.S. customer base, where it’s currently conducting trials with several undisclosed brands and hiring in sales. It’s also hiring in sales in China, Australia, and in Europe. There will be some product developments aimed at improving the deep integration between the CRM system, mobile platforms, and the social profiles belonging to customers, too, allowing brands an easier, one-click way to share, incent and reward their clients across platforms. In addition to the funding, Capillary has added Verious CEO Anil Pereira, formerly EVP of VeriSign and VP of American Express, as an advisor.

Additional reporting by Leena Rao