Digital adoption platform Whatfix is ​​targeting profitability in the next 7-8 quarters, according to co-founder Vara Kumar Namburu. The company, which recently secured $125 million in a Series E funding round led by Warburg Pincus and SoftBank Vision Fund 2, aims to balance its financial discipline with continued expansion. “We can be profitable very quickly if we choose, but we also want to grow quickly,” Namburu said, indicating that the focus remains on maintaining growth while working to break even.

The company expects to maintain its growth rate in FY25. “Next year’s growth will be, if not the same, higher than this year. This is what we are planning,” Namburu said. The company, however, did not disclose its FY24 figures.

For FY23, Whatfix reported a turnover of Rs 304 crore, compared to Rs 192.9 crore in the previous year. Despite a net loss of Rs 328.3 crore, this marks an improvement over the loss of Rs 706.3 crore recorded in FY22. The company’s revenue grew at a growth rate Compound Annual Compound (CAGR) over five years of 99%, while the net loss CAGR stands at 114%.

Annual recurring revenue (ARR) saw a 45% year-over-year increase in FY23, driven primarily by growth from existing customers. “Nearly 45% of our customers are growing every year, not just by renewing but by using more applications and more products,” Namburu noted. This expansion has been a key factor in the company’s growth, with multi-year contracts becoming more common among its approximately 700 clients, including more than 80 Fortune 500 companies, Namburu added. The company recently closed six contracts exceeding $1 million with major companies.

Whatfix’s revenue is driven by three core product lines: its core Digital Adoption Platform (DAP), which provides in-app consulting and training to improve user adoption of enterprise software; product analytics, which helps product managers and developers understand user behavior and optimize features; and Mirror, a newer tool that simulates real-world applications for training in a controlled environment. Although DAP continues to be the flagship offering, Namburu anticipates that the recently launched Mirror product will significantly contribute to future growth, particularly in industries requiring complex training and simulations. “We are also working on AI-based ‘agents’ that can perform actions autonomously within certain applications,” Namburu added.

Namburu said that although North America and India continue to represent approximately 65% ​​and 25% of turnover respectively. “We do not expect significant changes in revenue composition, but we expect growth in all regions,” he added.

The $125 million Series E round valued Whatfix at around $900 million after closing.moneyrepresenting a 50% increase from its Series D valuation in 2021. The company plans to use the funds to support product development, particularly in generative AI, geographic expansion and acquisitions. The company has already acquired companies like Airim, Nittio Learn and Leap.is.

The company currently employs around 960 people and plans to have between 950 and 1,000 by the end of FY25. After the Series E, Warburg Pincus has a 4% stake, while SoftBank Vision Fund 2 holds 12.9%. The founders own 15.1%, with Helion Venture Partners and Sequoia Capital owning 12.8% and 12.7%, respectively. The ESOP pool represents 7.2%.