Capillary Technologies: A Look at Its Public Listing Plans

Capillary Technologies, a prominent provider of customer loyalty and engagement solutions, has submitted its Draft Red Herring Prospectus (DRHP) to SEBI in preparation for a public listing. The document sheds light on the company’s financial situation, showcasing a significant turnaround in FY25.

Financial Performance in FY25

Capillary Technologies experienced a 14% increase in operating revenue, reaching Rs 598 crore in FY25 compared to Rs 525 crore in the prior fiscal year, according to the information disclosed in the DRHP.

Business Model Overview

Capillary Technologies operates on a B2B SaaS model, generating revenue through subscriptions and services for its platform focused on customer loyalty and engagement. Global brands utilise this platform to improve retention and personalisation.

Revenue Breakdown

Much of the company’s revenue stems from subscription-based software services, accounting for over 80% of total earnings, which grew nearly 20% year-on-year to Rs 481 crore in FY25, up from Rs 402 crore in FY24. The remaining Rs 117 crore originated from auxiliary streams including services and integration-related fees.

Regional Revenue Insights

Geographically, North America stood out as the largest revenue source for Capillary, contributing 56.6% of total revenue in FY25, an increase from 48% in the previous year. EMEA (Europe, Middle East, and Africa) represented 19%, while the Asia-Pacific region’s contribution fell to 24% from 33% in FY24.

Profitability and Earnings

Even though a detailed breakdown of expenses was not provided, the company’s return to profitability indicates improvements in its cost structure and more effective monetisation of its services. Capillary reported a net profit of Rs 14 crore in FY25, a notable recovery from a loss of Rs 68 crore in FY24. Additionally, its EBITDA reached Rs 78.5 crore in FY25, achieving a margin of 13%.

Funding and Investment Highlights

Capillary Technologies has successfully secured a total of $239 million in funding to date, with Avaatar Ventures leading the investment rounds.

Implications for Investors

As Capillary Technologies approaches its IPO, its transition to profitability is expected to be a key aspect for investors who are evaluating the company’s long-term potential and scalability.