Software provider Sprinklr has raised $200m from private equity firm Hellman & Friedman in a deal that values the customer experience management company at $2.7bn.

In addition to the new capital, Hellman & Friedman bought around $300m worth of ownership stakes from some of Sprinklr’s previous investors, according to the company’s chief executive and founder, Ragy Thomas.

Thomas declined to name the investors that agreed to sell stakes to Hellman & Friedman. However, firms that have backed previous funding rounds for the company include Battery Ventures, Iconiq Capital, JC2 Ventures, Wellington Management and Temasek. Battery, Iconiq and JC2 remain large shareholders and maintain board seats, according to a spokesman for Sprinklr. The deal with Hellman & Friedman is slated to close in October.

New York-based Sprinklr was founded in 2009 and offers technology that helps companies manage tasks such as marketing, advertising, market research and customer engagement. Many of its products use artificial intelligence to help clients better understand their customers. Large companies such as McDonald’s, L’Oréal, Microsoft and Verizon Communications are among Sprinklr’s clients.

Sprinklr’s valuation has grown significantly since a $105m funding round the company raised in 2016, which valued Sprinklr at $1.8bn. That round brought its total funding to $239m, according to a news release at the time.

The business is expected to have annual recurring revenue of around $400m at the end of the year, Thomas said

In addition to Hellman & Friedman’s investment, the company has secured $150m in convertible securities from Sixth Street Growth, the growth equity unit of global investment firm Sixth Street.

Thomas said that it was “prudent for us to put a nice cash reserve in the bank,” adding that there are likely to be opportunities for Sprinklr to double down on its growth. He cited investments in the company’s marketing as well as possible mergers and acquisitions as potential ways the new capital could be used. Sprinklr has purchased 12 companies so far, he added.

Thomas said that Covid-19 has caused an “unprecedented acceleration” toward the use of modern communication channels while also putting greater pressure on companies to engage with their customers.


Source: Wall Street Journal

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