Bootstrapping a $100 Million ARR SaaS Company: The Netcore Story

Published March 28-April 5, 2022


2 deals, 22 years apart

Recently, my company Netcore Cloud invested close to $100 million in Unbxd to buy out all the investors and take a 90% stake. Netcore is a Mumbai-based B2C SaaS company with a full-stack customer communications, engagement and experience platform for B2C companies. Unbxd provides AI-based search and product discovery for B2C brands, and is based in San Mateo, California and Bengaluru. Netcore’s strengths in India and emerging markets complements Unbxd’s customer base in the US and other developed markets. Netcore’s $85 million ARR combined with Unbxd’s $10 million ARR creates a combine with nearly $100 million ARR.

So, how did Netcore buy out global investors in Unbxd without ever raising capital? In a world where most new age companies lose money, how did Netcore build a profitable foundation? This is the story of how we built a $100 million ARR (annual recurring revenue) proficorn – private, profitable, bootstrapped and highly valuable. (Other examples of bootstrapped Indian B2B SaaS proficorns are Zoho, Wingify and Zycus.)

But first, a little detour to a day in late November 1999 when I was on the sell-side of a $115 million deal.

I had built IndiaWorld as India’s largest Internet portal. It had been the first India-centric portal to launch in March 1995 – just around the time Yahoo and eBay had launched for global audiences. It was the early days of the Internet – commercial access in India was made available five months later in August. IndiaWorld was not my first entrepreneurial venture – for the past three years, I had failed with multiple initiatives after my return to India from the US; a multimedia database venture and an image processing platform were the two prominent ones.

IndiaWorld grew to be very popular among NRIs (non-resident Indians). Its family of portals included (news), (search), (cricket) and (food). We also designed and managed over 200 corporates websites. IndiaWorld was profitable since its early days – revenues coming first from website design and hosting, and then from advertising.

In late 1999, I saw many other Internet companies raising capital and spending aggressively for growth. I had tried to raise capital through the past four years and failed. It was then that I got two offers to sell; in a matter of weeks, our valuation rose from $40 million to $115 million in a competitive process managed by DSP Merrill Lynch. And so it was on November 29, 1999 that the acquisition of IndiaWorld was announced by Satyam Infoway, which had just listed on Nasdaq about a month ago.

22 years later, I was participating in a similar-sized deal – this time on the buy-side. Netcore, in its 25th year, was investing $100 million to take a majority stake in Unbxd. The capital was coming from Netcore’s internal accruals, thanks to 15 years of consistent profitable growth under 3 CEOs (Abhijit Saxena, Girish Nair and Kalpit Jain). I had stepped back from active day-to-day management in 2007 to ensure that Netcore became a professionally run company and was not constrained by my limitations as a founder.

As an enterprise software company which has made the transition to SaaS, Netcore’s investment into Unbxd is planned as an accelerator on our path to an IPO – to ensure not just that the global growth story continues but that the 25% employee holding in Netcore gets liquidity and enables wealth creation for our past, present and future employees. For me, the vision is to build Netcore into an enduring great company. As I wrote at the start of 2022: “Netcore has a unique opportunity to build a “profipoly” – not just for ourselves but also for our customers. As an entrepreneur, nothing can be more exciting – lead the creation of a new world with the power of our ideas and products. If we execute well, Netcore can truly become a global company, with all the right adjectives – growing, profitable, enduring, great, forever. The leaders will change, but Netcore as an institution should thrive. That is the best legacy of an entrepreneur.”


Netcore + Unbxd

From Netcore CEO Kalpit Jain’s blog:

Founded in 2012, Unbxd provides AI-powered search-personalization to leading eCommerce retailers and D2C brands. They offer best-in-class product discovery and search relevance to significantly improve customer retention and conversions. Their customers include marquee brands across the USA, UK, and Australia, including Mattress Firm, Express, Ashley Homestore, Home Shopping Network, Advance Auto Parts, The Children’s Place, Mitre10 and Kookai.

Bigger, Better, Stronger.

  • With Unbxd, we now have a strong foothold in the US and developed markets.
  • Strengthen our dominance in India and SEA.
  • Immense cross-selling and upselling opportunity
  • Unbxd’s AI-powered search solutions augment Netcore Cloud’s full-stack Digital Experience Platform (DXP), enabling eCommerce retailers/ D2C brands to deliver a rich shopping experience.
  • Beyond the product, the Unbxd team shares our strong commitment to solving  customers’ problems through technology and innovation.

What does this mean for our customers?

  • Enhanced capabilities in product discovery and search optimization, eCommerce retailers and D2C brands will be able to forge connections with consumers by delivering a relevant and memorable experience.
  • A unified view of the consumer, with an entire user journey in a single platform delivering bespoke experiences.
  • Interactive feedback loop for crafting an effective customer retention strategy.
  • Excellent monetization capability, harnessing the power of search personalization and a full-stack digital experience platform.
  • Delivering 5-8x times the ROI on marketing spend by increasing conversion rates and lifetime value.

Since 2019, Netcore Cloud has undertaken three major acquisitions, the first being (Conversational AI platform), followed by (AI-First Omnichannel Personalization & Recommendation Engine) and (Real-time no code, product experience platform).  These three platforms, teams, and capabilities are already successfully integrated with the Netcore Cloud Platform.

Added Unbxd co-founder Pavan Sondur: “From a place where we had no money, no product, we quickly grew to be one of the most innovative eCommerce search engines to ever exist in the market. Our goal was to provide a seamless eCommerce experience that can generate profitable growth and recover the lost revenue of businesses. And there were several investors along the process who believed in our vision and pushed us forward…Joining that league today is Netcore Cloud. Netcore Cloud is a bootstrapped SaaS company that helps B2C brands and marketers create AI-powered new-age customer experiences at every touchpoint of a customer’s journey. Netcore Cloud’s full-stack marketing platform enables highly personalized digital experiences that are easily scalable and provide actionable analytics, real-time reporting, and quick to implement solutions across channels.”


Media Coverage – 1

The story about the Netcore-Unbxd partnership was broken by Saritha Rai of Bloomberg. (Incidentally, Saritha had done a story for TIME magazine in February 2000 about my IndiaWorld’s sale to Sify for $115 million. IndiaWorld was also bootstrapped and profitable – a proficorn!) From the Bloomberg story (an ungated version is available at Business Standard):

Rajesh Jain, 54, a pioneer of India’s internet industry, is readying his second startup Netcore Cloud Pvt. for an initial public offer within the next year, fresh after a $100 million acquisition this month.

“We’ve had initial conversations with half-a-dozen bankers and the formal process will start in the next couple of months,” Jain said over a Zoom call discussing the acquisition and the IPO. “We are targeting an IPO within the next nine to 12 months.”

Mumbai-headquartered Netcore is a software-as-a-service, or SaaS, startup that specializes in offering customer communication and engagement solutions to businesses. It bought about a 90% stake in San Mateo, California-based e-commerce search-personalization company Unbxd Inc.

The acquisition would strengthen Netcore’s offerings to its roster of global customers such as Pizza Hut Inc., The Body Shop Inc. and Tommy Hilfiger Corp. The deal would also boost the company’s subscription revenues to $150 million annually within the next 18 months from about $100 million now, Jain said.

Economic Times wrote:

Netcore sells marketing automation software to ecommerce firms and D2C companies, a crop of internet businesses for whom quality of search is critical for purchasers to close transactions. The search optimization algorithms of Unbxd would help Netcore’s customers offer better discovery on their platforms. “Many of the ecommerce companies other than the large ones such as Amazon, search is a big gap, and this is what unbxd cracked very well. It solves a problem for customers. Secondly, there is a big cross-sell opportunity through this acquisition for the both of us,” Jain said.

Jain said the slew of acquisitions also reflect the market reality of the need for consolidation, given the profusion of marketing technology companies in the market. “There are 8-10,000 martech companies in the world, so consolidation has to happen. As martech becomes more and more critical, marketers have to work with fewer companies, because the integration costs would become very high across multiple products.”

VC Circle wrote:

Unbxd, rolled out by Pavan Sondur and Prashant Kumar in 2012,  offers search solutions to improve retention and conversions for ecommerce retailers and direct-to-consumer (D2C) brands in the US, UK and Australia.

Currently, the company claims to power 3.5% of all the US e-commerce on-site search queries spread across 150 customers.

Unbxd has a host of clientele including Mattress Firm, Express, Ashley Homestore, Home Shopping Network, Advance Auto Parts, The Children’s Place, Mitre10 and Kookai, among others.

The company was backed by investors like Nirvana Ventures, Chiratae Ventures, Eight Roads and Inventus Capital.

“The coming MarTech era will be defined by budget shifts from Adtech to MarTech as brands will focus more on unit economics and valuing existing customers. This will lead D2C/ecommerce brands to accelerate their spending towards delivering personalized customer experiences.

Unbxd’s AI/ML tech stack will empower our customers to track their shopper’s interactions with search and implement site-wide personalization, merchandising, along with shopper-focused recommendations,” said Kalpit Jain, Group CEO, Netcore Cloud.

“Netcore Cloud platform is growing rapidly at 40% YoY (with international markets growing 100% YoY ). We are positioned as the digital proxy in emerging markets. Added to that, this investment will enable us to get a strong foothold in the US and other developed markets as well,” said Nishant Jain, Chief Strategy Officer and Head of M&A, Netcore Cloud.


Media Coverage – 2

Times of India wrote:

Mumbai-based Netcore Cloud’s full-stack marketing platform complements Unbxd’s personalised digital experiences that are easily scalable and provide actionable analytics, and real-time reporting. The investment will expand its footprint and access to newer customers. “Unbxd is growing at 20%-30% annually and is at $10 million ARR. Netcore Cloud is at $85 million ARR and together we will be over $100 million ARR. We will make additional investments to accelerate growth to deliver personalised customer experiences,” said Rajesh Jain, founder and MD of Netcore Cloud.

Jain said Netcore equips B2C firms on the path to profitability. “Retail SaaS has good recurring revenue, and we are a profitable business. We plan to IPO in the next 12 months,” he said. Netcore Cloud caters to over 5,000 customers across the globe. It delivers 17 billion emails and tracks 100 billion marketing events every month.

Unbxd’s Sondur and Kumar said, “With our unique combination of personalisation solutions and Netcore’s robust full-stack marketing automation tech platform, it’s a perfect partnership that can capture cross-selling opportunities and scale the business globally.”

YourStory wrote:

“Unbxd’s AI and ML tech stack will empower our customers to track their shopper’s interactions with search and implement site-wide personalisation, merchandising, along with shopper-focused recommendations. This will enable brands to optimise their entire customer journey, providing the best-in-class customer experience,” [said Kalpit Jain].

“Netcore Cloud platform is growing rapidly at 40 percent YoY (with international markets growing 100 percent YoY). We are positioned as the digital proxy in emerging markets. Added to that, this investment will enable us to get a strong foothold in the US and other developed markets. Furthermore, the combination of Unbxd and Netcore Cloud’s capabilities will bolster our full-stack product offerings,” said Nishant Jain, Chief Strategy Officer and Head of M&A, Netcore Cloud.”

Mint wrote:

Software-as-a-service (SaaS) startup Netcore Cloud, which picked up a majority stake in Unbxd for $100 million, will acquire at least one more company before launching its initial public offering (IPO) early next year.

“That is the thought process —one more acquisition before we get to the IPO point,” Kalpit Jain, group chief executive, Netcore, said in an interview.

…“There is so much to build in marketing technology, but we cannot build all by ourselves. The idea is to look for companies that we could potentially acquire before and after the IPO,” said Jain. Netcore eyes both tuck-in acquisitions such as, and, and the likes of Unbxd which helped expand its presence. “Unbxd gave a good head start for us in the North America. We are on the lookout for a good company in Europe,” he added.

Inc42: “Commenting on the acquisition, Kalpit Jain of Netcore Cloud said that the AI and ML tech stack of Unbxd will help Netcore’s customers to track shopper’s interactions with search and implement site-wide personalisation, merchandising, along with shopper-focussed recommendations.”



Emerging Markets and Enterprise Sales

Netcore has been built without raising any external capital through its 25-year journey. It was not that I have not tried. Like in IndiaWorld, I have had multiple conversations with potential investors through the years. None materialised, but each conversation taught me what I needed to do to fix the flaws in the business. Because Netcore has been profitable, we were never under pressure to raise capital to meet working capital needs. For the past many years, as our profits grew, even as we invested in growth, we also built a healthy cash balance. Cash in a company grows at 4-5% annually. Converting that cash into a business can create far greater value. Hence, we scouted for large acquisitions to expand our footprint both in India and globally but did not succeed in closing any until the Unbxd investment opportunity came along.

Inorganic growth has been just one of many pivots we have made through our journey. The early days of Netcore were as a Linux-based enterprise mail software provider. While some part of that business still continues augmented by cloud solutions, the real growth of Netcore began when we focused on the needs of brands wanting to communicate with their customers. Push messages (SMS, email, push notifications and now WhatsApp) are the most important mechanism for B2C brands to bring their customers back to their websites and apps. As Netcore’s email and SMS business grow from 2007 managing to survive multiple changes in rules (Gmail in email, and TRAI in SMS), we decided it was time to move up the stack. Thus was born our foray into martech in 2015.

Through a combination of internal product development and two tuck-in tech acquisitions, Netcore has built a full-stack martech solution. The goal is to provide marketers with a unified view of their customers for omnichannel personalisation. From campaign management to journey orchestration, from analytics to product experience, Netcore’s CEE platform (customer engagement and experience) combined with its multi-channel communications capabilities has attracted hundreds of B2C brands as customers.

Even as we built our product capabilities, in 2019, we realised we needed to change our go-to-market strategy. Because we primarily sold in India and emerging markets, our focus had been on in-person engagement. We never needed much marketing. Our sales teams had built good relationships with most marketers. When Kalpit and I attended SaaStr in early 2019, we realised we had to change our approach to tap into global enterprises. We needed to adopt the SaaS playbook for the next phase of our evolution.


Global and SaaS

The one thing we do well in Netcore is learn. That is how we have survived and prospered through the past 25 years. There is a sense of paranoia that we are always one mistake away from irrelevance. And with 25% ESOP, there is a deep sense of responsibility that we are building this not just for ourselves and our customers but also for our employees.

In 2019, we made 3 key decisions: we would need to learn the SaaS way of sales and marketing, we would need to start focusing on developed markets to complement our emerging markets strength, and we would need to look at acquisitions since we would not be able to build the full martech stack on our own. The Unbxd investment and partnership is a perfect example of highlighting all three. Unbxd brings a very good complementary product range – search, recommendations and PIM (product information management) for B2C brands, especially ecommerce companies, retailers and D2C brands. Combined with Netcore’s communications and martech platform, it strengthens the full-stack solution for brands.

We are now going to be up against a different set of competitors. Even as global players from US and Europe sharpen their focus on the growing Indian market, they are also realising what we in Netcore have believed for a long time: that the future is about an AI-driven full-stack solution. So martech companies are also expanding their suite offerings. Interesting times lie ahead.

Netcore has been built with three key tenets: profitable growth, infinite mindset (thinking long-term) and extreme employee centricity. These three pillars have helped us drive 30-40% growth in our Platform (email and martech) business in the past few years. Many companies (even in B2B SaaS) are still losing money even after many years in business. Unlike B2C/D2C businesses where a lot of capital is burnt towards changing buying behaviour and buying customer loyalty, in B2B SaaS capital can be efficiently used towards getting GTM right and locking customers for life. Secondly, the focus of many of the founders is build-to-sell rather than build-to-last, and this drives a very different set of choices. Finally, investors rather than customers and employees take precedence, since the founding team’s stake gets repeatedly diluted over multiple rounds of financing growth (a euphemism for losses). Growth through customer money is more important than growth through investor money.

As I wrote in early 2022: “What got us here will not get us to the future. We will need to transform ourselves. I will need to unlearn and relearn. Most importantly, I will have to ensure that we build a team and culture capable of continuous renewal. The problem we are solving – helping businesses engage better with their customers to ensure retention and growth – will never go away. The methods will change because technology drives new habits in customers, forcing businesses to adapt… We will need to think along multiple operating horizons to make this happen. We will need to become consolidators with smart acquisitions. We will need to tap the public markets so we incentivise employees (25% of Netcore is owned by its past and present staff) and also create a currency for acquisitions. More importantly, we will need to anticipate the tech turns and stay ahead of them. We will need to strengthen our moats and create a sustainable competitive advantage. And who better to learn from than Jim Collins? The 20 Mile March needs Level 5 Leadership, the genius of the AND, a growth flywheel, a culture that encourages the firing of bullets before cannonballs, and of course, a return on luck.”


Netcore Today

Netcore has evolved through the years. Here is how we have transformed over the past few years:

  • SMS and Email –> Full-stack cloud platform
  • Enterprise customers –> Digital first brands
  • India à Emerging markets –> Developed markets
  • Organic growth –> Large acquisitions
  • Everything in-house –> Building a constellation of companies (ecosystem)
  • CPaaS company –> Leader in Digital Experience Platform (DXP)

We have done all this keeping in mind our promise to our customers to help them drive exponential, forever profitable growth.

Here is an overview of Netcore 2022:

  • 750 Netcorians globally
  • 5,000+ brands across all key global markets
  • US$ ~100 million ARR
  • Multi product SaaS across Communication, Engagement and Retention
  • 75% email market share in India; and 50% in SE Asia
  • Sending 18 billion emails and 3 billion SMS each month
  • 100+ billion events and 15 billion notifications monthly
  • Profitable for the past 15 years
  • Zero external capital raised: and debt-free
  • Great Place to Work: 4 years in a row
  • Named Contender in Forrester Wave report of Email Marketing Service Providers, Q1 2022
  • Received highest ratings in Gartner Peer Insights’ Voice of the Customer 2021 reports as a Customers’ Choice for Email Marketing and Multichannel Marketing Hubs
  • Four acquisitions and control investments (Quinto, Boxx, Hansel and Unbxd)
  • Four investments (ANS Commerce, EasyRewardz, ProfitWheel and Comsense)

Even as we build on our strengths in email, SMS and martech, there are many new ideas and innovations that we continue to work on. The one I am most excited about is Email 2.0 to make email cool again and make it a habit (delete to delight). If we succeed in transitioning brands from Email 1.0 to Email 2.0, we will be helping reduce “adwaste” – the $200 billion being uselessly spent by brands in reacquisition and wrong acquisition. Email 2.0 thus is at the heart of what I think of as “profit-centric marketing.” Email 2.0 is a key pillar of the coming martech era (Martech 2.0), which will prioritise retention, growth and cross-sell in existing customers rather than the acquisition-churn-reacquisition cycle.

Little did I imagine when I started Netcore in 1997 that we would survive and thrive. There have many near-death experiences, and we have emerged stronger from every such storm. The failure rate in startups is 99.99%. Netcore has beaten the odds, grown strongly, and is ready for an even more promising and profitable future.


Tomorrow’s Netcore – 1

The past two years have been a period that few foresaw. We lived through a pandemic that will for many of us become a defining period in our lives. Digital grew rapidly, compressing many years of growth. Work from home/anywhere entered out culture. There has also been massive capital inflows into many businesses as cheap money from central banks flooded the world. India is at the cusp of an entrepreneurship era. Innovation is remaking many industries. But even as things change, there are some constants. Innovation and marketing will always be at the heart of every business. That is what we in Netcore need to remember.

Bootstrapping our way to $100 million in ARR has been no mean achievement. When I began Netcore, the goal was to get to 10 crore in revenue. (IndiaWorld was 3 crore when it was acquired.) The 10 become 100, and now it is 1000. We have perhaps taken much longer than we should have to get to this stage, but that is now in the past. We need to look ahead to a new future – keeping some of the things that have got us this far, unlearning a few that hold us back, and imbibing new ideas to build better. We need to chart a new path to drive exponential forever profitable growth of our own and create what is the ultimate moat – a “profipoly” (profits monopoly).

Netcore, together with Unbxd and future partners, has a great opportunity to create a global B2B SaaS company from India – focused not just on developed markets but also in emerging markets, and be among the one of the world’s leading Digital Experience Platforms (DXP). US-based enterprise customers today don’t shy away from buying good Indian products. Brands globally need to build better relationships with their customers; Netcore has many of the solutions that can help them do that. A greater focus on existing customers will also end the $200 billion of “adwaste” that is the single biggest pain point faced by business leaders. Businesses which can help brands create more stickiness, better engagement and greater loyalty will be the successes in tomorrow’s world – not just enriching the lives of their customers but also winning their hearts and money.

Tomorrow’s Netcore must empower modern marketers in global mid and large brands with full-stack AI-first martech platform, layered with innovations and complemented by KPI-focused customer success teams.

  • Netcore’s solutions enable creation of data-driven long-term relationships,
  • superior conversations, engagement and experiences
  • delivering on the 4Rs (right person, right message, right channel, right time),
  • which leads to better retention, reactivation and referrals,
  • which in turn leads to reduction of wasteful adtech spending,
  • thus maximising CLV, especially from Best Customers, and
  • driving exponential forever profitable growth

Tomorrow’s Netcore must offer the Genius of AND which eliminates the Tyranny of OR for modern marketers

  • Be the world’s first integrated progency (Product AND Agency)
  • which offers platform AND owns KPIs
  • is comprehensive AND cost-effective
  • delivering point solutions AND full stack
  • leveraging the power of machines AND humans
  • powering profits AND growth

My hope is that this Netcore of the future can become an institution that outlasts me and even the current leadership team. Marketing as a function is never going away in brands, and hopefully, neither will Netcore.


Tomorrow’s Netcore – 2

In the continuing learning journey, the next Netcore will need to focus on many new things going forward.

Coming Martech Era: I have written extensively in the past few months about the shift from Martech 1.0 to Martech 2.0. [See: The Coming Martech Era: Driving Exponential Forever Profitable Growth.] Adtech budgets will shift to Martech as brands seek a path to profitability; the 50% waste in adtech because of reacquisition and wrong acquisition is not sustainable. CAC (customer acquisition cost) is the new rent for digital brands eating into their profits. A business that cannot make profits is not a business at all; it is a “non-profit.” There are many exciting new ideas which will power this shift. Best-Rest-Test-Next customer segmentation framework based on CLV (customer lifetime value). Velvet Rope Marketing. Best Customer Genome. Email 2.0. Atomic Rewards. Web3 Tokens. Hooked Score. Microns. µniverse. Earned Growth Rate. Adtech-Martech Bridge. Progency. (These are themes I have covered in my previous writings.)

Talent: Even as companies battle for customers, there is another battle underway – for talent. Attracting and retaining employees has become equally important because it is people who will deliver the products, platforms and profits of tomorrow. Creating learning environments where employees can enrich their own skills and create better versions of themselves will be increasingly important.  We have to do the same at Netcore. Our stock options program offers a wealth creation opportunity that no short-term salary hikes can match.

Life as a public company: Netcore will soon IPO and become a listed entity in India. The responsibilities as a public company grow to also include investors. Delivering good predictable profitable growth is what will be expected of us. The narrative is changing from the race to becoming a unicorn to race to profitability. While we will get a currency via our stock for driving consolidation, that will only happen if investors have the confidence that Netcore is building a dominant position in key product segments and geographies with a large TAM (total addressable market). They are investing in our future; and the day we list will be like another Day Zero for Netcore; the work begins afresh for the next 25 years.

M&A: We will need to learn from the likes of Danaher and Constellation Software on how to do acquisitions right. Most acquisitions fail, as history has shown us. And yet, the ones that work can have a transformative value and create great value for all stakeholders – customers, employees and investors. We have to create a playbook to ensure we can do this right and as a repeatable process. The goal is to adopt a three-pronged strategy of “build, buy and partner” to unlock value going forward.

Netcore Business System: Netcore will need to become better daily. We will have to ensure that we learn from practices like Kaizen to create an internal efficiency machine that is capable of doing “more with less.” It will be about automating internal business processes and information flows to create a real-time enterprise, which can also combine agility and innovation. With an employee strength that will soon cross 1000 and revenues which will touch $150 million (over Rs 1,000 crore), Netcore needs to reinvent its organisation architecture and retrain its leadership to become more process-driven and yet have decentralised decision-making to maintain the entrepreneurial spirit that has guided our past.

We have a great opportunity to show the power of “Made in India, for the World.” I always remember these words of William Burnham: “Make no little plans. They have no magic to stir men’s blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency. Remember that our sons and grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty. Think big.”

The company that began life in a 300 square foot office in South Mumbai a quarter century ago is now ready to think long, aim high and build big.