“Your most unhappy customers are your greatest source of learning,” Amazon founder Jeff Bezos once said.
The realisation reflects a structural truth of today’s digital economy, where acquiring users is easy, but retaining them is both expensive and complex. In fact, multiple studies have found that retention can call for anything between five and 25 times the cost of acquisition, making engagement and loyalty central to long-term profitability.
This economic paradox inspired Raviteja Doda and Yashwanth Kumar to conjure up MoEngage as a customer engagement platform, using behavioural analytics, cross-channel orchestration, and AI-driven tools to help brands improve retention, lifetime value, and repeat transactions.
After raising $280 Mn in Series F funding last year, crossing nearly $100 Mn in annual recurring revenue (ARR), and claiming profitability in the October-December quarter, MoEngage is now gearing up to hit Dalal Street. Its recent reverse flip from the US to India highlights the IPO plan.
The startup’s evolution from early entrepreneurial failure to a scaled global SaaS platform shows how retention economics can be converted into a defensible business model.
Reaching The Retention-First Thesis
MoEngage has its roots in the engineering and entrepreneurial instincts of the two cofounders. Doda and Kumar saw the emergence of India’s startup ecosystem during their days at IIT Kharagpur.
The duo was inspired by their senior Anneesh Reddy of Capillary Technologies when they began experimenting with small ventures. Their early project, WeInform, an SMS marketing tool for college festivals, offered an initial glimpse into digital communication and user engagement.
After graduation in 2010, Doda worked with Cisco and Kumar served Metro Graphics until they returned to entrepreneurship a year later. They rolled out Delhight Circle, a mobile-first coupon and local deals platform, in 2011. While Delight Circle managed to attract users, it struggled to retain them. Marketing spends delivered short-lived spikes in activity, followed by steep drop-offs. The founders realised that the real bottleneck was not growth, but sustainability.
This was a decisive experience. Instead of building another consumer-facing product, Doda and Kumar chose to address the systemic weakness they had encountered such as absence of sophisticated, real-time retention tools for mobile-first companies.
By 2014, as smartphone adoption accelerated across India and Southeast Asia, the opportunity became clearer. Startups were spending aggressively on acquisition but lacked visibility into post-installation behaviour. Churn was high, and decision-making was largely intuition-driven.
The founders designed MoEngage to plug this gap by converting raw behavioural data into actionable engagement strategies.
Building A Scalable Product To Go Global
Early products from MoEngage focussed on real-time tracking of user behaviour within the mobile apps. It allowed companies to segment users dynamically and trigger personalised messages based on actions, preferences, and lifecycle stages.
The company’s first client, TaxiForSure, led platforms like Gana, ShopClues, Snapdeal, Just Eat, and BigBasket. High-volume-yet-price-sensitive customers of these platforms forced MoEngage to prioritise scalability, reliability, and performance from the outset.
By 2015, the company had built enough traction to raise seed funding from Helion Venture Partners. Around the same time, the founders realised that the customer engagement software was inherently global. They moved to the US and joined the Alchemist Accelerator, where they refined their enterprise sales strategy and global position. While India remained a testing ground for product-market fit, North America and Europe offered larger deal sizes and longer contract tenures.
This dual market strategy paid off. Indian clients provided volume and rapid feedback, while West delivered pricing power and brand credibility.
Today, North America contributes around 30% of MoEngage’s revenue, Europe and the Middle East make up about 25%, while India and Southeast Asia roughly 45%.
The company has shifted its focus towards mid-market and enterprise clients. Enterprise customers now account for nearly 70% of revenue and generate net revenue retention (NRR) of about 120%, reflecting strong upselling and cross-selling dynamics. This enterprise skew has firmed up the company’s business predictability and improved its long-term valuation profile.
Creating An AI-Powered Retention Engine
MoEngage built its tech stack on its unified customer intelligence platform. The system integrates data from multiple sources like mobile apps and websites, offline touchpoints, emails, SMSes, push notifications in-app, and web messaging.
This data is consolidated into real-time customer profiles, enabling brands to analyse behaviour from the first interaction onwards. This helps marketers spot users weighing an exit, detect drop-offs in purchase funnels, analyse cart abandonment, and identify segment customers by intent and engagement patterns. Campaigns can then be automated across channels with personalised content and timing.
This approach has enabled MoEngage to position itself not merely as a messaging tool but a revenue optimisation platform. Its flagship cross-channel engagement product still contributes nearly 80% of revenue, highlighting sustained product-market fit.
As AI became a central differential, MoEngage launched Sherpa, an AI engine that optimised message variants and delivery times, in 2018. This initiative was supported by a $9 Mn Series B round led by Z47 Partners.
It introduced Merlin AI, a Generative AI pilot for marketers, more recently. Merlin allows users to design campaigns, build segments, and extract insights using natural language. It also enables predictive modelling and real-time optimisation.
According to the company, Merlin has helped attract customers migrating legacy platforms such as Salesforce Marketing Cloud, Adobe Campaigns, and Oracle Marketing Cloud.
MoEngage competes against the likes of CleverTap, WebEngage, Braze, Salesforce Marketing Cloud. “Our competitive advantage lies in our full-stack architecture. Unlike pure-play analytics or messaging providers, we control our data pipelines, delivery infrastructure, and AI layers,” Doda said.
This vertical integration supports scale. The platform reportedly processes and sends nearly 4 Bn messages every day, creating high switching costs and operational defensibility.
Listing, Liquidity, And Innovation Cycle
While MoEngage’s recent $280 Mn funding round signals strong investors confidence in its long-term narrative, it also raises expectations around execution, capital discipline, and eventual public market readiness.
The company is deploying this capital across three stated priorities: expanding its footprint in the US and India, deepening its AI capabilities, and pursuing selective acquisitions. While strategically sound, each of these initiatives carries execution risk in an increasingly competitive and cost-conscious SaaS environment.
The push towards inorganic growth, particularly in analytics, personalisation, and vertical-specific solutions reflects an urgency to accelerate product depth and shorten the innovation cycle.
Acquisition in martech and customer data platforms are often difficult to integrate, both technologically and culturally. Poor integration could dilute MoEngage’s product coherence and strain margins, especially as it scales its enterprise footprint. More importantly, there are other players in the space with similar offerings at a much lower cost.
To its credit, the startup has navigated the broader SaaS slowdown better than many of its peers. Amid compressed valuation and elongated sales cycles, MoEngage claims to have added 50% more customers annually over the past three quarters. This suggests that its retention-focussed position resonates in uncertain macro conditions, where enterprises prioritise monetisation over expansion.
Yet, this resilience is partly structural. In downturns, tools that improve conversion, reduce churns, and optimise marketing spend are seen less as discretionary software, and more as operational necessities. By positioning itself as a revenue-impact platform, rather than a pure marketing solution, MoEngage hopes to hedge against cyclical demand shocks, intensifying competition and the rise of AI-powered engagement tools.
The startup’s reverse flip from the US to India reflects both opportunity and constraint. Indian public markets have become more receptive to profitable, global SaaS companies, offering valuation support and regulatory clarity. At the same time, a domestic listing will put MoEngage through greater scrutiny around governance, disclosures, and consistency of performance, areas where many late stage startups have struggled after their listings.
Doda’ assertion that the company will be IPO-ready by mid-2027 sets a clear external benchmark. Meeting this timeline would require more than revenue growth. MoEngage must show durable profitability, predictable cash flow, disciplined capital allocation, and mature corporate governance. Any slippage in these areas could weaken the investor confidence ahead of the IPO.
Edited By Kumar Chatterjee
Creatives By Varshita Srivastava
The post The Economics Of Retention: How MoEngage Built A Defensible Moat In A Crowded Market appeared first on Inc42 Media.
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