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Capital Efficient Gupshup Is Preparing For An IPO, Says Its Co-Founder And CEO Beerud Sheth

The conversational commerce unicorn is currently leveraging the $340 million capital it raised in 2021 to double down on mobile-first economies like Southeast Asia (SEA), Latin America and Africa

Capital Efficient Gupshup Is Preparing For An IPO, Says Its Co-Founder And CEO Beerud Sheth
Beerud Sheth, Co-founder and chief executive officer of Gupshup
POSTED ON December 29, 2022 10:42 AM

After bagging $10 million from Helion Venture Partners, Globespan Capital Partners and CRV in 2011, Gupshup raised another $340 million from investors like Fidelity Management, Tiger Global, Think Investments, Malabar Investments, Harbor Spring Capital, certain accounts managed by Neuberger Berman Investment Advisers and White Oak last year. This gave it an entry into the coveted unicorn club. 

Beerud Sheth, co-founder and chief executive officer of Gupshup tells Outlook Business that the start-up is using this capital to build on the top of its product stack and offer services across voice, video and messaging to its clientele. 

Over the past few years, the conversational messaging platform witnessed healthy growth courtesy the pandemic when businesses moved to digital channels. Sheth claimed that the company’s business has been growing at a fast clip, registering 70 per cent growth this year, and is likely to post similar numbers in the coming year.

Edited excerpts

Is Gupshup planning for another funding round or will it continue to rely on internal capital?  

Gupshup has been profitable and is witnessing steady growth. We raised the recent round to expand our product capabilities and build our current product stack. We are capital efficient and are preparing for an IPO and will take a call (about fundraising) based on the market conditions. 

How has Gupshup managed its finances to follow through with five acquisitions in the past year while ensuring that its profitability and revenue projections are unaffected? 

Since September 2021, Gupshup has acquired rich communication service platform Dotgo, cloud telephony firm Knowlarity, conversational banking company Active.ai, digital shopping assistant AskSid, and customer experience solution OneDirect. Behind the fundraises and the acquisitions is our vision of building a comprehensive offering that connect businesses to their customers through all possible channels. 

These include WhatsApp, Instagram, Telegram, messaging, voice and video chat (more than 30 channels currently). We want to provide clients with automation tools for marketing, e-commerce and customer support; develop and provide sector-specific features. 

Our last fundraise, plus the healthy growth in our business has given us enough strength to execute these acquisitions. All our acquired companies are contributing to the comprehensive product suite we are building for the next generation of business messaging. 

What is Gupshup’s business plan to tap the growing conversational commerce industry in India and globally? 

Conversational commerce holds huge potential and has been gaining more traction recently. It relies heavily on advanced messaging capabilities, which we are well positioned to offer. 

The recent funding will help us scale our go-to-market initiatives with respect to this. It will also help us double down on geographies such as SEA, Latin America and Africa, which are essentially mobile-first economies.  

Our clients are spread across India, Latin America, Europe, Southeast Asia, the Middle East, and the United States. We are investing heavily in these regions and have expanded exponentially. 

How can the exponentially growing D2C ecosystem leverage conversational commerce technologies to have a seamless chat-to-cart journey without breaking the bank?  

Messaging apps like WhatsApp are evolving into a digital storefront, through which customers could discover products listed by several brands, restaurants or small businesses. It gives them the ability to order, pay and track these orders on one messaging interface. 

Businesses use conversational experiences for a variety of use cases including user retention, lead
Businesses use conversational experiences for a variety of use cases including user retention, lead generation, and marketing communications

This simple feature saves users from downloading multiple apps to access services of different businesses and becomes a single-entry point for all user-led communications for consumer brands. We work with several D2C brands who want to tap into the growing messaging user base and open a direct channel with their customers. 

The sheer number of things these brands can do on a messaging channel like WhatsApp is quite a lot; from gaining leads, sending card abandonment alerts to order updates and support. The high engagement and open rates on WhatsApp are a key draw for all brands, including D2C companies. Also, for these brands, WhatsApp offers great scope for personalisation and assisted buying, leading to higher conversions.     

Currently, most D2C brands use conversational experiences for customer support rather than the entire sales journey. How can they gain from full-funnel conversational flows, be it through WhatsApp Business API or social media channels? 

Gupshup works with over 40,000 businesses globally, and processes close to nine billion messages a month. Enterprises are now migrating to two-way conversational experiences to reach consumers where they are. 

While I agree customer support is a major function, conversational commerce is gaining pace rapidly. Businesses use conversational experiences for a variety of use cases including user retention, lead generation, and marketing communications. 

We work with companies across retail/ ecommerce, edtech, BFSI, healthcare, and automotive to name a few. 

For instance, Gupshup developed a WhatsApp chatbot that retains the core functions of the edtech Doubtnut platform, with a streamlined and a user-friendly interface that provided a seamless experience. Students could send their questions via WhatsApp and receive links to five solution videos, with options in 11 different languages, in all of 10 seconds. The chatbot produced a 95 per cent user satisfaction rate, resulting in the number of daily users going up by 224 per cent. 

For NoBroker, Gupshup’s WhatsApp bot helped property owners to interact with NoBroker and reply with pictures on the chat window itself. Once the real estate platform’s deep-learning algorithm approves the photos, they are then automatically uploaded to the online property listing. 

The overall time taken to upload photos to property listing was reduced from three days to six minutes. This resulted in 20x annualised RoI (return on investment) and 2.8x increase in property let outs or sales. 

Over 70 per cent of Indians prefer to message companies than send an email, call or visit their website, while 75 per cent are likelier to do business with a company that they can contact via messaging. Yet, most conversational commerce technologies, even those fueled by AI and ML, are very rudimentary and lack the personalisation aspects necessary for a consistent and comfortable shopping experience. How can brands address this disconnect? 

Personalisation is a key aspect of the conversational AI solutions that we offer to our customers. Gupshup’s digital shopping assistant helps retail brands deliver exceptionally bespoke customer experiences and instant product recommendations even before a customer poses a question, with exponential accuracy. 

In fact, one of our live implementations of this feature is for a Netherlands-based European luxury e-tailer with close to 1,000 successful product recommendations delivered. This feature essentially extrapolates user data and signals from every interaction to predict preferences and then recommend products, colours, brands, sizes, and more. 

These recommendations can be based on anything from the customers' selection of a particular product, colour, the addition of a product to their cart, or even based on a question asked regarding a specific product or range of products. Based on the extracted information, Gupshup's product recommendation model builds up a robust profile of the customer with a deep understanding of their needs and likes and products that could potentially be exciting to them. 

Not only does this feature help break any friction in the purchasing journey by reducing product discovery stress, but it also leverages current trends and buying patterns to provide seamless shopping experiences via personalised recommendations. The latter is especially useful when interaction data on the customer in question is limited or inconclusive, allowing the brand to continue offering personalised support, no matter what. 

Another one of our AI products applies cutting edge deep learning algorithms to understand and comprehend customer queries in order to find the best answer to the question, thus enabling higher customer satisfaction and lower customer service costs. With conversational memory retention capability, the AI is able to follow human-like contextual conversations. 

For example, if a customer usually responds to messages during lunch hour, the AI will trigger messages at that particular time. Besides, the technology is a great combination of AI and human as complex queries get diverted to an agent. 

Is Gupshup using human behavioural imprints to evolve conversational commerce modalities to exhibit a nearly human-level interaction, be it first-level queries, complex use-cases or end-to-end resolutions? 

Gupshup’s NLP based chatbots can assess user inputs and create a response with contextual analysis. For example, there are thumbs up and thumbs down buttons in chats, for users to leave feedback on the interaction. Now, if a customer gives a thumbs down, the AI learns what kind of interactions are not preferred and does not repeat them again. 

ecommerce
5G will allow data-intensive apps to be integrated into online shop systems, without impacting the page load time and consequently customer experience

In fact, it goes a notch further to not just understand context but also capture emotion and tone. The system learns from all ‘human-customer’ conversations to simulate the perfect ‘human’ response to any future query from a customer. 

How will the advent of 5G impact conversational commerce to create a more immersive shopping experience for customers? Has Gupshup already started working on 5G? 

With 5G, ‘mobile first’ could quickly become ‘mobile only’, without waiting for the very last e-commerce providers to recognise the signs of the times and ensure the necessary customer experience in their mobile shops. Mobile commerce will also be boosted by technological innovations made possible by the 5G cellular standard and its massively increased bandwidth. 

5G will even allow data-intensive applications to be integrated into online shop systems, without impacting the page load time and consequently the customer experience as well. 

Voice technology adds another dimension. Developments in the area of IoT (internet of things), such as smart headphones with speech recognition and automatic real-time translation, make it easier to tap into new markets and enable service departments to immediately respond to customer requests and orders from other language regions. 

While most start-up brands use conversational commerce solutions to reduce cost can it also become a growth engine for them?

Conversational commerce opens a direct channel for brands to reach out to their customers. Over 80 per cent of consumers have reportedly abandoned transactions in the last year because brands wanted them to install their app in order to do business with them.

Today, conversational messaging apps have transformed the way we communicate and are fast replacing websites and apps as the main interface between brands and consumers. 

At Gupshup, we have seen WhatsApp pick up significantly as a conversational commerce channel. Businesses are leveraging the captive user base of WhatsApp which in turn is revolutionizing the future of shopping, enabling them to engage with consumers, sell and manage products on WhatsApp, and deliver a seamless buying experience to users. 

We recently launched an end-to-end buying journey on WhatsApp for Wow Skin Science, a D2C beauty brand. Customers can browse through Wow’s catalogue, place orders and make payments within WhatsApp. The offering not just brings convenience for WhatsApp’s native users but also helps them with assisted buying. Apart from Wow, we have a number of brands in the lifestyle space who are introducing conversational commerce for their customers. 

Haus & Kinder, a new age home and baby essentials brand saw its month-on-month revenue jump 120 per cent with WhatsApp’s business solution which included marketing, commerce and support. 

We worked with an Austrian skin wear brand to elevate shopping experience across customer touch points. With Gupshup’s virtual advisor, the brand saw an increase in quarterly online sales revenue. We have also brought Instagram Commerce for two leading personal care brands, Livon and Vicco. 

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