Exotel closes A91-led round; Mumbai Angels investors exit with bumper returns

Exotel Techcom Pvt Ltd has handed handsome returns to some of its earliest investors from angel network Mumbai Angels as the cloud telephony platform closed a new round led by venture capital firm A91 Partners that was floated by former Sequoia executives.

Exotel said in a statement that some of the early Mumbai Angel investors who exited in this round have made 18x returns on their investments. This translates into an internal rate of return (IRR) of over 40%.

Venture capital and private equity firms typically chase an IRR of 20-30% in rupee terms in India.

Exotel also said that it has closed the Rs 40 crore ($5.47 million) funding round led by A91 Partners.

In December 2020, it was reported that Exotel had pulled in fresh funding from A91 Partners more than eight years after the cloud telephony platform had raised seed funding from Blume Ventures and Mumbai Angels.

Exotel was launched in 2011 by Shivakumar Ganesan, Ishwar Sridharan, Vijay Sharma and Siddharth Ramesh. Sharma quit the company later.

The startup says it helps to set up a secure and reliable business phone system on the cloud with no additional infrastructure or equipment.

Exotel had raised seed funding from Blume Ventures and Mumbai Angels in early 2012. It did not raise external capital since then even as its revenue has seen a remarkable jump.

The company's net sales more than doubled to Rs 76 crore in the fiscal ended March 2019 from Rs 27.6 crore in 2015-16, according to VCCEdge. The company has also posted operating profit in the three years to March 2019.

In an interaction with VCCircle, Blume Ventures' partner Ashish Fafadia had singled out Exotel as one of its portfolio firms from which the early-stage venture capital firm could walk away with good returns.

In 2015, Exotel made two acquisitions: Croak.it, a voice-based social media startup, and Voyce, a platform that allows businesses to gather customer feedback.