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The round values the company at “more than $1 billion,” founder and CEO Sashi Narahari told me, without providing more specifics.
Existing backers Susquehanna Growth Equity and Citi Ventures also participated in the new round. With this latest round, Houston-based HighRadius’ total known (venture and private equity) funding climbs to $175 million. It previously raised a $60 million Series A over late 2017 and early 2018.
Founded in 2006, HighRadius may not technically be a “startup” in the literal sense of the word. It has, however, notably only taken external capital in recent years. The trend of historically bootstrapped companies that have been around for a while taking on large rounds of capital is picking up. Late last year, I covered Toronto-based 1Password’s massive $200 million Series A in its first external round of funding in its 14-year history. (I also later talked to several other CEOs that followed a similar path).
What it does
So what does HighRadius do exactly? The company describes itself as a “SaaS provider for integrated receivables, such as credit, cash application, EIPP, collections, deductions, and payments.” In other words, the platform aims to automate routing receivables and payments processes (such as predicting invoice payment dates, for example) across a variety of functions. In other other words, Narahari told me, it “helps companies get paid faster on their receivables” via AI and machine learning.
“For example, if you bill your customers, the average time to get paid from the time of billing is about 45 days,” he said. “We use various sets of technologies to help companies reduce that by 10 percent.” While that might not sound like a big deal, Narahari maintains that 10 percent, when you’re talking about large sums of money, provides “huge value” to a company’s bottom line in terms of working capital optimization.
HighRadius currently has more than 400 customers, including over 200 of the Forbes Global 2000 such as Walmart, Nike and Procter & Gamble, and claims to process more than $1 trillion in transactions per year. It has over 1,000 employees spread across offices in Houston, India (its second headquarters), Amsterdam and London.
HighRadius said the new capital would be used to accelerate its continuing platform development and expansion of its geographic reach. With its first round of funding, the company expanded into the European market with a focus on the United Kingdom. Now, its main objective is to further expand within Europe, Asia-Pacific and Latin America.
The company also recently launched into treasury management to help its customers further optimize their working capital.
“Receivables make up about 40 percent of a company’s balance sheet,” Narahari told me. “We are helping them put more cash in their pockets.”
With that first round of funding, HighRadius also entered the midmarket, which it defines as companies with $200 million to $1 billion in revenue. Its ARR has been growing by about 70-75 percent year-over-year, Narahari said. The company was profitable and still “mostly” is but is in “growth” mode so profitability is less of an immediate objective.
It’s kind of refreshing covering a Houston startup raising such a big sum that isn’t in the oil and gas or medical industries. It’s a good start to the year for Texas for sure.
Illustration: Li-Anne Dias