Private equity firm
Warburg Pincus
The $100-150 million project (roughly Rs 833 crores to Rs 1,250 crores) is expected to be launched in the near future
Funding round
in SoftBank-backed software-as-a-service (
SaaS
) firm
Whatfix
People with knowledge of the issue said.
SoftBank is also expected to participate in the round. This will see Helion Venture Partners, and Eight Roads Ventures, who hold more than 13% of the Bengaluru-based and US-based firm, making partial exits. The people added that the round will be a mixture of primary and secondary shares sale.
According to the people, Whatfix will likely raise primary capital with a valuation of $850 million. This implies that the secondary share sales are likely to be at a discount. “Warburg has been in contact with Whatfix for some time and has now issued the term sheet. They are going to lead the round,” said a person who did not want to be named.
A term sheet is an offer to invest after due diligence in a company. In a secondary deal, existing investors sell their shares to new investors and the money does not go to the company’s coffers.
ETtech
ET’s emails to Whatfix founder Khadim Baatti, Warburg Pincus Eight Roads Ventures, and Helion Venture Partners were not answered until the time of publication.
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ET first reported on this in September of last year.
Warburg Pincus, a US-based company, had begun early-stage discussions with Whatfix.
SoftBank may increase its holding in Icertis while US health and insurance giant Kaiser Permanente may lead a new funding round at a flat valuation. SoftBank could increase its stake in Icertis, while US health insurance giant Kaiser Permanente might lead a new round of funding at a flat valuation. Whatfix is reported to have an annual recurring income of $70-75 millions. Its growth was driven by an increase in demand from corporate clients looking to improve employee productivity, reduce training costs and reduce training times.
The SaaS valuations, based on revenue multipliers, have been readjusted to reflect the global decline in valuations of technology-led businesses. Multiple SaaS investors claim that valuations have fallen to 10-12 multiples after reaching record highs up to 30 multiples in 2021. According to Bessemer’s Nasdaq Emerging Cloud Index, SaaS valuations are currently trending at an average of 6.5 times revenue.
According to Venture Intelligence, SaaS investment dropped across all company stages in the past year. SaaS firms received $1.53 billion in private equity and venture funds for late-stage companies in 2022. However, the amount dropped to $421 millions in 2023. SaaS investments in mid-stage companies fell to $920 million from $2.1 billion the year before.
Tracxn data shows that Whatfix, which was founded in 2014, was valued at $568 millions in 2021, after a $90 million funding led primarily by SoftBank. It has raised a total of $141 million.
Whatfix offers a range of services to its clients, including product adoption, digitalization, user onboarding and training, application guidance, self service solutions, performance support, and self-service solutions.