Local software firm attains rarefied status
HighRadius reaches $1B valuation, which makes it a ‘unicorn’
Software company HighRadius has closed a $125 million funding round, valuing it at $1 billion and putting it in the elusive category of tech unicorns, according to CEO Sashi Narahari.
The Houston company announced the Series B funding round on Tuesday, bringing its total funding to $185 million and vaulting its valuation into the three-comma threshold that most startups only dream of reaching.
Though $1 billion is an artificial threshold, it does provide a talking point for those seeking to attract capital, talent and corporate headquarters as Houston seeks to foster a high-tech ecosystem.
“There is no story more compelling than the story of a tech company that made it,” said Harvin Moore, president of Houston Exponential, a nonprofit that works to accelerate Houston’s tech industries by connecting and promoting Houston’s vari
ous innovation players.
HighRadius uses artificial intelligence to help large companies get paid faster. A company with revenue of $10 billion, for instance, will have roughly 10 percent of its bills outstanding at a time. That’s $1 billion the company could be using to drive growth.
Narahari, who moved to Houston as a software developer in 1998, started the company in 2006. Those early days were more focused on paying his personal bills than becoming a tech unicorn, a term not even coined until 2013.
“When I started the business back then,” Narahari said, “I was like, ‘Let me build this so at least I can pay myself a salary. So my wife doesn’t think, ‘What is wrong with this guy?’”
The company now has 1,000 employees, with 200 based in Houston, and 400 clients including Baker Hughes, Schlumberger, Johnson & Johnson and Adidas. Half of its customers are on the Forbes Global 2000 list of the world’s largest public companies.
Narahari said the recent funding round, led by Iconiq Capital, with participation from existing investors Susquehanna Growth Equity and Citi Ventures, would be used to continue investing in the company’s technology and to accelerate its global expansion. It will also help target more companies with $200 million to $1 billion in revenue. Its main target has been companies with more than $1 billion in revenue.
The term unicorn was coined by venture capitalist Aileen Lee to highlight the rarity of such companies at the time. According to financial data and software company PitchBook, Lee sorted through 60,000 software and internet companies that received funding between 2003 to 2013 and found just 39 were valued at $1 billion or more.
Unicorns have since become less rare, with PitchBook identifying 187 active unicorns in the middle of last year, but HighRadius is the first unicorn in Houston, according to PitchBook data that’s comprehensive back to 2002. There have been seven unicorns in Texas.
And while Narahari shies away from the term unicorn — “I did not want to use that term,” Narahari said. “Our marketing team convinced me. I’d rather lie low and keep working” — he said having companies grow and be successful in Houston creates the foundation for the next generation of startups. Employees from HighRadius could then go on to start new companies.
Houston Exponential’s Moore, who keeps several stuffed unicorns around the Houston Exponential office as a mascot, was excited about the milestone.
“HighRadius’ $1 billion valuation demonstrates how the Houston’s tech ecosystem is growing and maturing,” he said. “We will see more of these because we have so many more startups now than we did when this company was started.”