Everstone-backed Wingify looks to expand offerings, eyes $100 mn annual revenue

“Our next goal would be to clock about $100 million in annual recurring revenue (ARR) over the next couple of years. This is the best time of our business now and we are looking at a bunch of offerings within our visual website optimiser (VWO),” Gupta told Mint in an interview.

The company currently has an ARR of over $50 million.

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“We want to offer a suite of products with multiple offerings for different audiences,” he said, adding that the company will continue to focus on growth. With a client base across more than 140 countries, Wingify serves over 3,000 brands globally with about 90% of its revenue coming from the US and Europe. It serves sectors such as enterprise, media travel, BFSI and healthcare.

The commentary comes as Singapore-based private equity firm Everstone bought a significant majority stake last week in the startup at a little over $200 million. DC Advisory was the financial advisor for the transaction.

While the terms of the deal were not disclosed, it is largely a secondary transaction with co-founder Paras Chopra and his father paring a big chunk of their stakes, resulting in a majority change of control at Wingify.

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While this isn’t the first buyout of an Indian tech company, experts believe that such transactions encourage venture capital firms also to take smaller, more capital-efficient bets while giving bootstrapped founders a path to liquidity.

“Almost every other tech acquisition in the past decade was a company trying to build a larger business but couldn’t. So their cap tables, cost bases, growth rates, employee strengths and risk appetites are those of highly-VC-funded companies, not of capital-efficient ones. For them, the acquisition was plan C, not plan A,” Ritesh Banglani, a partner at Stellaris Venture Partners said in a social media post. He explained that it can be plan A for a company like Wingify as they are profitable from an early stage.

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Meanwhile, Chopra, who had stepped down from day-to-day activities about 5 years ago, will continue to be a shareholder and remain on the board. He plans to use the proceeds from the stake sale to double down on his new venture.

“I plan to invest it into my own venture. I’m currently working on a foundational research lab for artificial intelligence to build models for India and the world. The venture is expected to be bootstrapped much like how I built Wingify, at least for the initial years,” Chopra told Mint.

Gupta and other senior leaders have also sold a small part of their stakes in this transaction but will remain a part of Wingify to further strengthen the company’s global presence.

In a secondary transaction, shareholders sell their stakes to other existing or new investors and no new capital is injected into the company. Secondary transactions usually take place at a discount to primary shares.

One of the most prominent software buyouts

The deal reflects one of the most prominent software buyouts in India, underscoring Everstone’s confidence in the country’s thriving technology sector. Other companies in its tech portfolio include Acqueon, Omega, MediaMint and Apexon.

In FY24, Wingify clocked a 30% increase in revenues to ₹289 crore. Its profit also grew 30% to ₹61 crore, according to a report by The Arc. The company has been bootstrapped and has not secured external funding since its inception.

“While there were some conversations we explored a few years ago, we took a conscious decision to not go ahead as we always had enough money on our balance sheet and were well-capitalised to fund our expansion plans,” Gupta said. “We have shown growth consistently over the years with sustainable unit economics.” This was possible for Wingify as the company turned in profits right from the start.

After the company was formally incorporated in mid-2010, the company made $4,000 in the very first month, exceeding its target of $1,000 when its products were priced between $50 and $729. The company introduced various plans that were targeting people with different price points within that range.

Wingify’s main flagship product VMO was aimed at optimizing digital experiences for businesses and helps drive growth. The software enables companies to improve user experience of their websites and facilitate more conversions. It also helps clients analyse consumer behaviour, recommend changes to enhance user interaction and deliver data and analytics to personalize their experience on the app.

With VWO, Chopra and Gupta were attempting to make a better product than Google’s website optimiser as the search engine was more focused on analytics.

Initially, its customers were bloggers and other individual users, who switched to the company’s premium plan after a free trial run. Over time, enterprises got on board.

Gupta also emphasised on the company’s focus on customer-centricity. “After Paras and I, our first hire was the support staff. In the initial days, we spent at least 18 hours a day addressing software bugs and complaints from users. We wanted a strong support team to represent us so we could keep customers at the heart of what we do.”

Wingify continues to anticipate more customers to come on to its platform even as the SaaS sector has witnessed a global downturn with companies slashing their software spends against the backdrop of an uncertain economy marred by lower budgets.

For instance, US-listed company Freshworks was among those that went through significant hurdles such as layoffs and internal restructuring over the last year as a result of the broader downturn. As of Friday’s close, its stock fell more than 17% to $18.3 in the last year.

Yet, Wingify’s Gupta remains upbeat on the prospects for SaaS companies. “The fundamental usage of software has only gone up, as even everyday utility products from watches to refrigerators have seen some integration. So, the dependence has only gone up. We operate more in the b2b segments and I think those sets of customers really value what we do and don’t mind paying for our subscriptions,” he said. However, some of the individual consumer subscriptions may see some impact from this, Gupta concluded.

Bessemer Venture Partners also alluded to the robust potential of the SaaS market in India and expects it to generate 3x as much revenue by 2030, driven by rapid acceleration of AI technology. The VC firm estimated that the startups are likely to add $20 billion to $25 billion in new revenue to create a market with $50 billion in ARR by 2030.