South African-founded chat-based commerce platform Clickatell has secured $91 million (R1.3 billion) in its series C round.
This round was led by Arrowroot Capital, with participation from Kennedy Lewis Investment Management, Endeavor Global and Harvest.
Clickatell, which has delivered double-digit profitable growth for several years, will use the series C capital to scale and expand three key areas: accelerated development and innovation of its chat commerce offering; expansion of its footprint in the US; and scaling of sales and marketing efforts on the back of growing demand from leading brands.
In a statement, the company says the new capital will also allow it to significantly grow its engineering skills.
According to Clickatell, it has already earmarked over 200 positions, with a strong focus on boosting its African skills complement in the coming months.
“In 2019, Clickatell was the first to launch chat banking, bringing banking services functionality to chat channels,” says Pieter de Villiers, co-founder and CEO of Clickatell.
“Our successes would not be possible without the trust and collaboration of our customers − some of Africa’s largest and most successful companies in the world. We look forward to working with businesses and financial institutions across the continent to enable chat commerce, the future of digital commerce and engagement.
“Soon, every consumer in Africa will engage family and friends via chat, plus connect, interact and transact with the brands they love through their favourite chat platform.”
The company has processed more than 30 billion interactions, and two billion commerce transactions during the COVID-19 period alone, as it enabled customer-centric brands to connect, interact and transact with their customers, wherever they were sheltering in place during the pandemic.
According to the firm, with an $80 billion total addressable market, the chat commerce market is viewed as the third big wave of digital commerce, following the e-commerce and app commerce markets.
It adds that chat is the largest digital platform in the world, with 7.7 billion users compared to 4.7 billion internet users, making it next to impossible for businesses to operate without communicating and transacting with consumers in chat channels.
“We have a shared vision with Clickatell that brands will need to invest in chat commerce to transform their customer experience,” says Matt J Safaii, founder and managing partner at Arrowroot Capital.
“With 93% of conversations that transpire on its chat commerce platform ending in a transaction, Clickatell is sure to continue to make waves in this growing sector. We’re delighted to support them on their way to becoming the category-defining, global leader in chat commerce.”
“Endeavor is incredibly privileged to invest in Clickatell, one of the most admired and successful high-growth companies to emerge from South Africa. Clickatell has an exceptional CEO and talented team, who are leaders and role-models to entrepreneurs across the ecosystem, and we are fortunate to play a smart part in their journey,” says Alison Collier, Endeavor South Africa managing director.
Commenting on its African plans, De Villiers says the company will not only be looking to grow its already substantial market influence, but will continue to invest in addressing the widening gap between the demand and supply of digital skills on the continent, as well as encouraging entrepreneurship and start-up innovation.
“While expansion in the US is a high priority in this capital raise, Africa will remain a core market for us and one where our purpose of creating a better world for all through technology really shines through.
“We are proud of the work we do with www.SiMODiSA.org on supporting entrepreneurship on the continent through the Start-up Act, as well as furthering the creation of future-proof jobs via the TechXit digital skills initiative,” says De Villiers, who is also chairman of SiMODiSA, an industry-led initiative to address and overcome barriers facings SMEs and start-ups in South Africa.
“Africa has a wealth of talent and Clickatell will continue to work with the public and private sectors to ensure the potential, both of individuals and companies, can be realised,”
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