New Delhi, May 16 -- Software-as-a-service (SaaS) startup Capillary Technologies has acquired Kognitiv, a Canadian software company specializing in customer experience and loyalty insights, as it targets international expansion and double downs on its presence in the North American market.

Bengaluru-based Capillary, backed by investors like Warburg Pincus and Peak XV Partners, said the acquisition of the Toronto-based startup aligns with its strategy of consolidating the customer loyalty space. This marks Capillary's fourth acquisition in the sector, following its 2021 purchase of US-based Persuade.

The financial terms of the transaction were not disclosed.

Kognitiv's client portfolio includes more than 30 brands such as PetSmart, Hallmark, Yuu Rewards, Kirkland's, Curaleaf, Sharjah Co-op, and several major international hotel chains. The deal further solidifies Capillary's footprint in the US, Australia, New Zealand, Southeast Asia, and the UAE.

The company also announced plans to continue advancing Kognitiv's AI-driven loyalty platform.

"We've been strategically expanding our loyalty capabilities through targeted acquisitions since 2021. With Persuade, Brierley+Partners, and Tenerity's Digital Connect Assets (now Rewards+) already under our umbrella, the addition of Kognitiv enhances our technological capabilities and expands our global reach," said Jim Sturm, president, North America at Capillary Technologies.

Speaking about the acquisition, Aneesh Reddy, co-founder and CEO, Capillary Technologies, said, "Kognitiv's expertise in omnichannel loyalty solutions and their presence in North America complements our global expansion strategy."

Founded in 2012 by IIT-Kharagpur alumni Aneesh Reddy, Ajay Modani, and Krishna Mehra, Capillary provides loyalty management and customer engagement solutions through its SaaS platform. The company employs over 150 professionals in the US and more than 800 globally. Capillary also counts Anant Choubey and Sridhar Bollam as co-founders.

Its previous acquisitions in the loyalty and customer experience space include Aimia's Loyalty Solutions in 2020.

Capillary reoriented its strategy during the COVID-19 pandemic, shifting towards international expansion and new industry verticals. This pivot led to acquisitions like Persuade and expansion into Asia, the US and Europe.

For the financial year ended March 2024, the company's consolidated revenue rose 83% to Rs 590 crore from Rs 323 crore in the preceding year, as per VCCEdge. Its net loss narrowed to Rs 59 crore from Rs 110 crore in FY23.

In 2023, Capillary secured $45 million in a Series D funding round from Avataar Venture Partners, along with its limited partners Pantheon, 57Stars, and Unigestion. Filter Capital and venture debt platform Innoven Capital also joined the round.

Published by HT Digital Content Services with permission from VC Circle.