Tiger Global leads $50-mn Series C investment in SaaS firm Zenoti

Zenoti, which offers software solutions to the beauty & wellness industry, has raised $50 million (around Rs 350 crore) in its Series C round of funding.

New York-based investment firm Tiger Global led the investment, according to a statement. Existing investors Norwest Venture Partners and Accel also pumped money into the software-as-a-service (SaaS) firm, which is headquartered in Seattle and has a large presence in India with offices in Hyderabad.

Zenoti co-founder and chief executive Sudheer Koneru told TechCircle that the fresh capital would be utilised for product development, sales & marketing and to hire talent for its US and UK operations.

In all, the company has raised $71 million in external funding since it was founded nine years ago.

“The beauty and wellness markets are large and growing. Zenoti is improving productivity for many salon and spa operators,” Scott Shleifer, partner and managing director at Tiger Global, said in the statement.

Zenoti’s last-known funding round took place in 2016, when it had raised $15 million (Rs 100 crore then) in a round led by Norwest Venture Partners, along with existing investor Accel India.

A year before that, Zenoti had secured $6 million in Series A funding from Accel and others.

Tiger Global, the lead investor in the latest round, has returned to India's startup market with a bang after a three-year hiatus, Since the start of the year, it has placed bets on agritech startup Ninjacart, customer lifecycle management platform CleverTap, ride-hailing platform Ola’s electric vehicle arm and expense management startup Fyle.

Zenoti

Operated by Soham Inc, the company was founded in 2010 by serial entrepreneur Sudheer Koneru and his brother Dheeraj Koneru.

Zenoti offers a full stack of services catering to the beauty & wellness industry that includes booking appointments, billing & payments, customer relationship management, staff management, inventory control and analytics.

“With momentum of more than 100% growth in the past year and on target to achieve 130% growth in 2019, we’re excited to be leading the transition of this industry to the cloud,” Sudheer Koneru said.

While the US, Europe, Australia and New Zealand remain its major markets, Zenoti’s Indian operations account for nearly 15-20% of the total business. Likewise, around 80% of its total headcount operates out of India, Sudheer Koneru added.

Zenoti’s client roster includes the likes of Truefitt & Hill, Lakme, Kaya Skin Clinic, Blunt, Waxing the City, Massage Heights, Mario Tricoci, Prose Boutiques, Sono Bello and Rudy's Barbershop.

While it primarily caters to the beauty and wellness industry, it has also recently expanded the use case of its software platform to other segments such as hospitality.

A masters in computer science and an alumnus of  IIT Madras and University of Texas, Sudheer had earlier co-founded Latitudes Pro, a high-end health club brand, as well as Tangerine, a spa and salon chain brand catering to the high-end luxury segment.

After starting his career at Microsoft, Sudheer Koneru worked at companies that include en-tech firm Intelliprep, enterprise software company Click2learn, and computer software firm Sumtotal Systems. Dheeraj Koneru, co-founder and vice president of global sales, is a physics graduate from Cornell University and followed the same career trajectory as his sibling.