GupShup, Exotel drive consolidation in cloud communications

For years, the two startups were a speck on investors’ radar. But after back-to-back funding rounds, they are racing to make acquisitions and emerge as leaders in the cloud communications space. This even as the competition heats up with global players’ entry



Madhav Chanchani

Supriya Roy

January 11, 2022

12 Min Read

GupShup, a company that serial entrepreneur Beerud Sheth launched 17 years ago, didn’t raise any capital between 2011 and 2021. In this decade, it moved from being an SMS-based social platform to a messaging service provider for businesses.

In 2012, Shivakumar Ganesan, a former Yahoo and early Flipkart employee, received Rs 2.5 crore in seed money for his cloud telephony startup, Exotel, from Blume Ventures and Mumbai Angels. Exotel didn’t raise another round for over eight years.

Despite prolonged stretches of no fresh funding, the two companies hit profitability, albeit with slow or erratic topline growth at times.

Their funding status, however, changed drastically after 2020. They snagged huge amounts as the pandemic accelerated the use of cloud communication tech — internet-based voice and data communications tools — and venture capital flowed into the startup ecosystem at a torrid pace.

  • Exotel: $100 million from backers such as A91 Partners, Steadview Capital and Sistema Asia Fund across debt and equity rounds.
  • GupShup: $340 million from the likes of Tiger Global Management, Fidelity and Think Investments.

The companies are now using their war chests to expand into new service segments and consolidate the market. GupShup, the bigger of the two revenue-wise, is in discussions to acquire Sequoia-backed Knowlarity in one of the largest acquisitions in cloud communications, said two people briefed on the matter.




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