IMB 989

ABHOY K. OJHA

LEADSQUARED: MANAGING RAPID GROWTH AND GLOBAL EXPANSION

The founders of LeadSquared, Nilesh Patel, Chief Executive Officer (CEO), Prashant Singh, Chief Operating Officer
(COO) and Sudhakar Gorti, Chief Product Officer (CPO), had just ended a hectic day of celebrations in June 2022 after
becoming another Bengaluru-based startup that had achieved the status of a Unicorn. As the rest of those gathered
for the celebrations gradually headed home, the three founders stayed back for some private conversations. Quite
naturally, they reflected on all the ups and downs of their journey so far, reminiscing about the role of LeadSquared
customers, team members, friends and family, angel investors and private equity firms, and also luck and serendipity
that, in addition to their hard work, had helped them achieve the rapid growth and success that had let them join
the Unicorn Club.

Their musings were interrupted by Abhinav Mahajan, Group Product Manager, who had been with the organization
for over 2 years. Mahajan enquired about a business opportunity in the US operations that needed to be addressed.
Quite abruptly, the conversation shifted from recollections of the wonderful past to conjectures of the possible
changes in the future, particularly the challenges in expanding global operations, including addressing the new
opportunity that Mahajan wanted to discuss, while dealing with the after-effects of the pandemic. They chose to
put the celebrations behind them and brainstorm on the steps that needed to be taken in the immediate and near
future. Mahajan, who was part of this discussion, was requested to prepare a document that captured the key issues
discussed and make suggestions for the next steps that the founders could consider before charting a revised growth
plan for global expansion.

LEADSQUARED

LeadSquared was a Unicorn headquartered in Bengaluru that provided end-to-end marketing, sales, and onboarding
automation solutions on a SaaS (software as a service) platform. Its mission was to offer the best-in-class sales
execution platform for high-velocity sales teams. Its product platform focused on “empowering organizations to run
high-velocity sales at scale” by building connected, empowered, and self-reliant sales organizations. The
LeadSquared platform used the power of automation to reduce operational tasks traditionally performed by
customer acquisition teams. Once these tasks were automated, the salespersons were free to concentrate on direct
customer interactions to improve customer experience and accelerate the sales process. In 2022, it had about 1200
employees largely in India. In addition to operations in Bengaluru, it had operations in Noida, Hyderabad, and
Mumbai in India, New Jersey in the US, and Johannesburg in South Africa (after acquiring another firm in the same
space). More recently, it had established offices in Jakarta, Indonesia and Melbourne, Australia. It had over 2000
customers across 40 countries.

The founders (see brief profiles in Appendix 1), with each having significant software product development
experience, including some experience developing CRM (customer relationship management) products, chose to
bite the entrepreneurial bug, like many other friends and colleagues they knew, to found Proteans, a software
product development services firm. After Proteans was acquired by Symphony Teleca Corporation in 2010, and the
transition process to the new owners was completed, they once again jumped into entrepreneurship to launch
MarketXpander Services in 2011. They already had the core essentials of a CRM product idea in mind when they
launched but were a little cautious in their approach – they were willing to take risks but wanted to avoid taking a

Abhoy K. Ojha, Professor (OB), IIM Bangalore, prepared this case for class discussion. This case is not intended to serve as an
endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes.

Copyright © 2023 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or transmitted
in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) – without the
permission of Indian Institute of Management Bangalore.
LeadSquared: Managing Rapid Growth and Global Expansion

plunge into product development without a better understanding of client needs than they already had. Unlike many
startups that jump into product development with a strong technology focus but without a full understanding of
market needs, they wanted to be able to get a better understanding of the real issues in the sales process so that
the product they developed could be effective. Their initial focus was on the niche market of small and medium
enterprises (SMEs) in India that were often neglected by dominant CRM firms. They were also aware that some of
the dominant products were prohibitively expensive for this segment or required additional customization that
pushed the products beyond the reach of most firms in the target market. In the early stages, the organization aimed
to consult with SMEs in India and provide marketing and consulting services. They intended to use this experience
to understand the pain points of sales in this segment so they could build software products to support the sales
process. That way, rather than having to change the established processes to meet the product requirements, the
product could be built around the processes that were already being used without too much of changes. They also
wanted to make the functioning of the product intuitive and user-friendly to allow a sales force that may not be
highly qualified or tech-savvy to use the product. After about 15 months of working with many clients and more
closely with about a dozen clients and understanding the issues involved, they had greater clarity on the type of
support required by sales organizations and the gaps in existing CRM solutions. Based on this learning, the team was
able to completely outline the product they wanted to develop.

The product, branded as LeadSquared, was launched in 2013 and continued to provide the base platform that the
firm had built on to expand its offerings. The firm discontinued its consulting services to become a pure product-
based company and was also re-named LeadSquared. In 2015, the National Association of Software and Service
Companies (NASSCOM) named LeadSquared, which had reached about 100 B2B customers, as an ‘Exemplar’ for the
industry. In the same year, LeadSquared’s mobile application was launched to empower salespersons in the field to
cater to B2C businesses. Over the next few years, the firm continued to add features (Marketplace, Sales
Automation, Contact Center Integration, Smart Views, etc.) that received wide acceptance in the market, particularly
with organizations trying to reach customers in tier-3 and tier-4 cities in India. In 2018, Frost and Sullivan awarded
LeadSquared the ‘Marketing Automation Company of the Year’ and in 2019 it won the Deloitte Fast 50 for the fifth
time. In India, LeadSquared competed in parts with players such as WebEngage and CleverTap, both marketing
automation platforms that had similar aspirations.

In the initial years, the growth for LeadSquared was driven by the education sector, with Think and Learn Private
Limited being one of the early clients to come onboard. The next driver was the financial services sector, but
gradually the product got wider acceptance across several industry segments. After having experienced rapid growth
in the Indian market, LeadSquared went global with expansion into the US in 2020 and other geographies like South
Africa and the Asia Pacific in 2021. In early 2022, it received the National Startup Award for Enterprise Systems in
the CRM category from the Department for Promotion of Industry and International Trade, Government of India in
recognition of the firm’s success in expanding beyond India.

As shown in Exhibit 1, the revenues had increased from INR 99.6 crores in 2021 to INR 193.5 crores in 2022, while
total expenses had increased from INR 113.3 crores to INR 262.3 crores in the same period, resulting in a loss of INR
62 crores in 2022 relative to INR 11.3 crores in 2021. At a glance, this increase in losses may seem alarming, but the
organization was progressing toward breaking even, and the high expenses reflect the strategy to enter the US
market with the ‘big bang’ that would deliver revenues in the long run. Exhibit 2 shows the breakdown of the
expenses in both years. It suggests that LeadSquared had increased expenses under every head as they built capacity
to scale globally. Such expenses are not unusual in cases where an organization prepares for rapid scaling,
particularly in the technology industry, which is often referred to as ‘blitzscaling’.

FINANCING THE VENTURE

Like many other highly successful firms, LeadSquared was a bootstrapped startup. The founders pooled their
personal resources, including proceeds from the sale of their earlier venture, to start operations in the office facilities
of a friend’s firm that had extra space. LeadSquared was initially built for the B2B space but gradually pivoted to

Page 2 of 7
LeadSquared: Managing Rapid Growth and Global Expansion

focus on the B2C space as their initial clients were from that space. They were willing to bet on the ability of their
product to support the needs of their clients. As mentioned above, an early client in this space was Think and Learn
Private Limited (popularly known as BYJU’s), which signed up with LeadSquared in 2014. It was a growing brand in
the EdTech space at the time and continued to remain a dominant player in the coming years, despite challenges.
Nilesh recalled this deal as a major milestone, “I had met with them one afternoon for the first time to explain the
product, and by the time I arrived back at my office, the first instalment of payment for a long-term relationship had
already been made.” This was a great boost to the LeadSquared team. Gradually, financial service firms, real estate
firms, and marketplace firms came on board providing confidence to the founders that they had discovered a market
niche in which they were creating value for their clients. While the revenue streams grew, they were not sufficient
to support the upfront investments that the founders wanted to make in the product to prepare for rapid growth.
They made several attempts to raise venture capital but were unsuccessful. As Nilesh suggested:

The VCs were largely focused on startups that were promising revenue streams in the US, while we were
developing a product to primarily address the challenges of the small and medium-sized firms in India. This
did not align with their investment thesis.

To finance the operations, the founders had to continue dipping into their personal funds and investments from
family and friends. Gradually, things started looking up when high net worth individuals from the technology industry
made angel investments worth about INR 17 crores over multiple tranches. One of the early angel investors was
Pradeep Singh, founder of Talisma, who knew LeadSquared’s CPO, Gorti from his stint at Talisma and trusted his
ability to build a product. This investment in 2015 not only provided funds to support operations but also validated
the value proposition that LeadSquared was offering as it came from a person who understood the CRM space very
well. In 2017, they received another angel investment from a high-profile technology entrepreneur, Jyoti Bansal,
who had just sold AppDynamics to Cisco for USD 3.7 billion, which was another big boost. These two investments
raised the profile of the firm and improved the future prospects of success, but this was still not enough for the VCs.
The founding team saw tremendous potential in the Indian market. As Nilesh put it, “There is so much to do in India.”
However, most VCs were focused on sales contribution from the US and provided feedback that suggested, “SaaS
companies can’t go big in India due to market size constraints” and made comments like, “You don’t seem to have
a global vision.”1

LeadSquared had better luck raising funds with private equity investors. Its revenues had reached INR 11 crores by
2017 and INR 19 crores by 2018. Based on this performance, in May 2019, it was able to raise USD 3 million in series
A funding from a private equity investor called Stakeboat Capital. In 2019, it earned revenues of INR 33 crores and
started its expansion into the US in early 2020 to further augment the revenues to INR 59 crores in 2020. In December
2020, the firm raised USD 32 million in series B funding led by Gaja Capital, another private equity investor, with
Stakeboat Capital and Jyoti Bansal also participating in this round of funding. In 2021, LeadSquared received support
from International Finance Corporation (IFC) to further expand into South Africa, Philippines, Australia, and
Indonesia. Based on the market boom during the pandemic, primarily in the EdTech sector and to an extent in the
FinTech sector, the company earned revenues of INR 100 crores in 2021 and INR 200 crores in 2022, of which 90%
still came from India. Based on this growth, in June 2022, WestBridge Capital, another prominent private equity
investor, invested USD 153 million (approx. INR 1,194 crores) in series C funding. Commenting on the investment,
an executive from WestBridge remarked:

LeadSquared has shown a remarkable ability to scale and grow efficiently. Its core SaaS metrics are unique
and best-in-class in the industry. Its focus on building an easy-to-use platform that transforms sales
processes through automation delivering unparalleled efficiency has significant potential for growth in the
global market.2

1
https://www.forbesindia.com/article/take-one-big-story-of-the-day/square-peg-in-a-round-hole-meet-leadsquared-indias-first-unicorn-
without-vc-money/77473/1
2
https://www.zeebiz.com/small-business/news-leadsquared-turns-unicorn-with-usd-153-mn-fundraise-from-westbridge-capital-187647
Both the links were last accessed on November 15, 2023.

Page 3 of 7
LeadSquared: Managing Rapid Growth and Global Expansion

WestBridge Capital valued LeadSquared at over USD 1 billion making it the 6 th SaaS Unicorn3 and the 103rd Unicorn
from India4 in the high technology sector. With the support of series C funding, the firm, which had about 1200
employees, planned to double its employee strength in 18 months, and double its revenues over the next 5 years.

CUSTOMER ACQUISITION

Once LeadSquared was launched as a product, the firm stopped providing consulting services and focused on
acquiring customers for the software product business on a SaaS platform. The firm was able to sell its product to
about 100 customers of SMEs in 2013, which provided useful feedback on the product but not necessarily a healthy
revenue stream. While there had been churn in this client base, many of the earliest clients continued to contribute
to a steady stream of revenues. Based on the feedback from the sales and marketing team at LeadSquared, they first
changed the pitch of the product, that was initially focused on both marketing and sales teams, to focus solely on
sales leaders as they were the real beneficiaries of the product. This increased the pull for the product in the market
and greatly enhanced sales.

One of the first significant sales was a 100-user license deal from a client that was a high-profile firm in the higher
education sector offering professional courses that came onboard in January 2014. The product was not yet fully
developed for the needs of the client, but they went ahead with the sale. The sale was not necessarily a financial
success but provided useful inputs for further enhancement of the product and the onboarding of the well-known
organization provided legitimacy for the product in the eyes of potential clients in the education sector. As
mentioned earlier, another significant early sale was to BYJU’s, which was still a small and fast-growing player in
2014. Other clients in the EdTech sector contributed significantly to LeadSquared’s revenues at the later stages. A
deal with one of the general insurance companies in 2016 opened the doors to a new market segment. Finally, a
deal with a large lending firm in 2017 was a high-profile client acquisition that brought recognition to the product.
Over time, LeadSquared’s clientele included Amity University, OLX, Dunzo, Acko, Practo, Kotak Securities,
Poonawalla Fincorp, and Angel One. With these clients onboard, the firm had established itself as an industry leader.

TALENT ACQUISITION

LeadSquared (earlier called MarketXpander at the time of launch) had its share of challenges in attracting talent like
any other startup. Initially, the brand was not well known and the ability to pay was limited; hence, making a value
proposition to high-potential employees was difficult. However, despite difficulties, the founders were able to hire
some high-caliber talent that had been great contributors to the product. Many continued with the firm while some
moved on to other opportunities. The ability to hire and retain talent had improved with the growth of the company
and increased recognition of the brand.

It was always more difficult to attract high-potential professionals in the technology domains as the supply of really
good talent was limited and the opportunities in India and abroad in the high-technology sector were tremendous.
LeadSquared was still unable to match the spending capacities of some other large companies and VC-funded
startups to lure the highly talented professionals, but relied on its strong purpose-driven story of making a difference
to the neglected SMEs that formed the bulk of the Indian economy and also across the world. It had been relatively
easier to recruit people on the business side and in sales and marketing roles, as there was more talent available
and LeadSquared had a better ability to match the market rates for such talent. There was a level of disruption due
to the pandemic, but the talent issues seemed to be back to normal, and the founders believed that they would be
able to ramp up in India without too many teething issues.

3
https://www.businessinsider.in/business/startups/news/leadsquared-is-the-sixth-indian-saas-unicorn-of-2022/articleshow/92360030.cms
4
https://stories.jobaaj.com/welcoming-indias-103rd-unicorn-leadsquared
Both the links were last accessed on November 15, 2023.

Page 4 of 7
LeadSquared: Managing Rapid Growth and Global Expansion

THE CURRENT CHALLENGE: MANAGING GLOBAL EXPANSION

The company planned to drive growth globally with new product offerings and enter new markets organically by
starting greenfield units or inorganically through acquisitions. LeadSquared started its expansion into the US in early
2020 by establishing a presence in Edison, New Jersey. The firm then entered the South African market with a reseller
partnership. Given the synergies, LeadSquared acquired the same partner to increase its presence in the greater
African market. It then expanded to offices in Jakarta, Indonesia and Melbourne, Australia. They planned to retain
the technology base in India relying on the abundance of high technology talent and relatively affordable rate, and
largely rely on developing local sales and business teams in the US and other geographies to drive the growth.

The challenge for the founders was to manage the growth in the US which was clearly the largest market with the
highest growth potential. They seemed to have enough funding for a few years and did not envisage the need to
raise more capital for global expansion in the near future. Hence, financing the venture was not a pressing concern.
For now, they did not need to pay too much attention to how they would finance the venture. There was also a
belief that if they were able to scale well, the revenues would grow fast enough to alleviate the need to raise capital
in the immediate future.

Customer acquisition was a challenge that needed to be addressed. LeadSquared had done well to onboard some
key clients. Based on experiences with these clients, they were able to refine their approach to customer acquisition
in the US. They needed to decide whether they should focus on diverse services across industries (mortgage, finance,
education, health and wellness, e-commerce, marketing, hospitality, and software) in certain geographies such that
the clients could be better served from their New Jersey base, or instead focus on a key industry (e.g., mortgage)
and attempt to provide specialized offerings to the industry across the US. Early experiences suggested that, given
the high level of competition in the target marker, a focused approach rather than a diffused approach to the market
would be better. However, the choice of approach was dependent on the type of sales talent that the firm could
acquire.

The immediate focus was on talent acquisition—building a sales team that could help growth in the client’s base.
The core of the team comprised persons who had been with the Indian arm for long and understood the products
very well. However, they soon realized that what had worked in India was unlikely to work in the US despite a focus
on SMEs, and they had to augment the core team with local talent who could better relate to nuances of local
customers. Hence, acquiring sales talent and clients in the US required attention. The organization faced some of
the same concerns that it had faced in 2013—a new firm with an unrecognized brand—making it difficult to attract
and retain employees. Although they hoped to overcome that with time, building the sales team was not as easy as
it seemed initially. The leadership had experience building a sales organization in India, but that experience did not
map easily in the US. In India, the vast majority of firms in LeadSquared’s target market relied on trust with the
salesperson rather than close evaluation of the product. As a result, the dynamic members of the sales team were
able to multi-task and could sell to clients across domains and deal with the ambiguity that they encountered.
However, US buyers were more mature and expected salespersons to have in-depth knowledge of their industry and
greater clarity on how the features of the product would benefit them. Hence, salespersons in the US preferred to
operate within a domain in which they could leverage their product expertise. As a result, it was harder to find sales
talent that could sell across sectors or domains and thrive in a context of uncertainty. LeadSquared had to learn
several lessons as they expanded into the US market and beyond.

What would be some other issues that the leadership at LeadSquared should consider as they pursued their global
growth strategy? Mahajan decided to do some research and identify key concerns that he could flag to his leaders
to ensure that the firm successfully transitioned into a global company.

Page 5 of 7
LeadSquared: Managing Rapid Growth and Global Expansion

Exhibit 1
Leadsquared Financials FY22

Source: Article by Harsh Upadhyay & Kunal Manchanda (October 11, 2022) on Fintrackr5

Exhibit 2
Leadsquared Expenses Breakdown

Source: Article by Harsh Upadhyay & Kunal Manchanda (October 11, 2022) on Fintrackr6

5
https://entrackr.com/2022/10/saas-unicorn-leadsquareds-revenue-touches-rs-200-cr-in-fy22-losses-soar-5-4x/
6
https://entrackr.com/2022/10/saas-unicorn-leadsquareds-revenue-touches-rs-200-cr-in-fy22-losses-soar-5-4x/

Page 6 of 7
LeadSquared: Managing Rapid Growth and Global Expansion

Appendix 1

Nilesh Patel
CHIEF EXECUTIVE OFFICER

Nilesh is focused on helping businesses to improve their sales execution and increase sales efficiencies. He is on a
mission to build LeadSquared as the software partner of choice for the sales execution needs of businesses, and he
firmly believes that an awesome product and great customer service are both central to making that happen.
He brings his decade-long experience in sales and marketing to the team. Previously, Nilesh was the founder of
Proteans, a recognized leader in the software product development services space. He helped build the company
from scratch to 350 people strong serving over 100 ISVs worldwide before it was acquired by Symphony Teleca
Corporation in 2010. Post-acquisition, Nilesh served as Vice-President of inside sales at Symphony before he decided
to start LeadSquared. Nilesh has a degree in engineering from Delhi University, and before founding Proteans spent
four years at IBM with their microprocessor test tools division.

Prashant Singh
CHIEF OPERATING OFFICER

Prashant is the co-founder and Chief Operating Officer of LeadSquared. He heads all post-sales Customer Centric
operations and is responsible for business retention, growth and expansion. Before LeadSquared, Prashant was co-
founder of Proteans, and he served as the COO. Post Symphony Teleca acquiring Proteans, he served as Vice
President and P & L head for business unit of Energy, Healthcare and Media verticals. Prashant is an alumnus of IIT
Delhi with a degree in Mathematics and Computers. Before founding Proteans, he was part of several product
development teams in Telesoft, i2 technologies and Oracle.

Sudhakar Gorti
CHIEF PRODUCT OFFICER

Sudhakar, co-founder of LeadSquared, heads the product design and development. He is on a mission to build
LeadSquared as the sales execution platform of choice for enterprises. Sudhakar was one of the founders of Proteans
and he served there as the CEO. He was instrumental in making Proteans a hugely successful and admired company
that won several international awards for its credentials in product engineering services space. Working with dozens
of world-class software vendors in the past has inspired him to take up the challenge of building the game-changing
software for marketers – LeadSquared. Sudhakar has a degree in Electrical Engineering from the Indian Institute of
Technology, Kanpur. Prior to founding Proteans, he served in various software development roles at IBM, Talisma
Corporation (now part of Campus Management Corp) and Oracle Software.

Page 7 of 7