September 25, 2012, 11:47 AM

India’s Capillary Technologies makes its move in the U.S.

Backed by $16 million, it’s building out social, mobile and loyalty applications.

Lead Photo

Capillary Technologies Inc., an India-based provider of technology for loyalty and marketing programs integrated with mobile and social media applications, is planning to use $15.5 million in venture capital to further develop its Internet-based “cloud” technology and expand in the U.S. market, the company said today.

“North America is the next major market for us and Silicon Valley will serve as our sales, marketing and product development hub as we serve our rapidly growing customer base,” says Krishna Mehra, co-founder and president, Americas, for Capillary.

Capillary says its existing client base covers more than 100 brands—including Puma, Nike and Pizza Hut—across 10,000 store locations worldwide. It says its client retailers serve more than 50 million consumers in the United Kingdom, India, Southeast Asia, the Middle East, South Africa and the United States. To support its expansion in the United States, the company recently opened offices in Palo Alto, CA, where it plans to base a sales and marketing team over the next several months.

With its Series A round of venture capital, Capillary plans to build out both its U.S. presence and its cloud-based technology platform. Its platform—which it calls Intelligent Customer Engagement—is designed to integrate with retailers’ store point-of-sale systems, loyalty programs, customer relationship systems and social media. In effect, Capillary says, the platform enables retailers to combine data on customers’ shopping behavior—including how they’ve been known to purchase groups of products, such as dresses and shoes—with their interests revealed on Facebook and other social media, and then use that combined information to send them targeted offers such as through digital coupons sent to their mobile phones while they’re shopping in a retailer’s store.

Capillary also plans to further develop its targeted marketing capacity. “We are investing substantially in our product development with a lot of focus on easy and accessible analytics through our cloud platform,” Mehra says.

The Capillary platform also includes a feature that it calls a “social sign-up” application, which is designed to encourage customers to join a loyalty program, Mehra says. For customers who have opted in to share information from social media, retailers can present them with an online or mobile loyalty program sign-up form pre-populated with their personal information, including the kinds of products and activities they prefer, along with an incentive such as a coupon.

In addition, Capillary enables retailers to instantly send product offers or loyalty points to customers whenever they take social actions such as Liking a product on Facebook or sharing product information with friends through social media or e-mail.

Capillary’s $15.5 million in funding was led by Norwest Venture Partners and Sequoia Capital, with participation from earlier investor Qualcomm Ventures. Mohan Kumar of Norwest Ventures and Shailesh Lakhani of Sequoia have joined Capillary’s board.

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