In a bold move underscoring its growth ambitions despite recent financial headwinds, Celebal Technologies, the Jaipur-headquartered IT services firm, is poised to raise INR 125 crore in its Series B funding round. Led by InCred Growth Partners Fund, with Norwest Venture Partners continuing to back.
RoC filings show Celebal Technologies’ board has approved issuance of 1,04,000 Series B CCPS at INR 12,019 each to raise capital. InCred will invest INR 80 crore and Norwest will invest INR 45 crore in the company. The funding is to support business expansion, working capital and general corporate purposes. This comes after significant operational growth but also deepening financial strain.
Doubling Valuation, Mounting Losses
This new capital infusion has nearly doubled Celebal’s valuation to USD 211 million (~INR 1,789 crore), as per some reports. Norwest Venture Partners will now command a 28.83% external stake in the firm, while new investor InCred will hold a 4.46% stake. The co-founders—Anupam Gupta and Anirudh Kala—still control over 70% of the company.
Founded in 2015, Celebal Technologies provides digital transformation solutions including generative AI, machine learning, cloud integration and application modernization. The company has presence across USA, India, APAC, UAE, Europe and Canada.
In FY24, the company grew 43% year-on-year in operating revenue to INR 275 crore from INR 192 crore in FY23. Total revenue including interest income and gains from current investments was INR 281 crore. But this growth came at a cost. Total expenses jumped 73% to INR 344 crore with employee benefit expenses rising 87% to INR 245 crore from INR 131 crore in FY23. Salaries and wages formed the majority of these costs as the company now has over 2,000 professionals.
As a result, Celebal Technologies reported a loss of INR 60 crore in FY24, compared to just INR 1 crore in FY23. The company was profitable in FY22, reporting a profit of INR 21.6 crore.
At a unit economics level, Celebal Tech spent INR 1.25 to earn every rupee, resulting in a negative EBITDA margin of -19.2% and a Return on Capital Employed (ROCE) of -39.1%. As of 31 March 2024, the company had current assets of INR 139 crore with INR 18 crore in cash and bank balances.
A Capital-Hungry Expansion Play
This Series B round follows the company’s earlier capital raises, including a USD 32 million (~INR 271 crore) Series A round in November 2022, led by Norwest, and an INR 80 crore debt round from BlackSoil in June 2024. This round is part of Celebal’s plan to scale, productize and go global.
As digital is becoming a part of every enterprise strategy globally, Celebal Tech is positioning itself as an enabler – at the cost of profitability in the short term. The funding boost will likely allow it to sharpen its service delivery and technological innovation while shoring up its balance sheet. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.