VCs invest over $54-M in BPO sector during April-June 2004

Venture Capital and Private Equity firms announced investments of over US$54 million in three India-based Business Process Outsourcing (BPO) companies during the quarter ended June 2004. According to data from TSJ Media, which tracks venture capital investments in India and Indian-founded companies worldwide, the quantum of funds invested was more than that during the January-March 2004 quarter (which saw US$46 million being invested in four companies).

The largest BPO investment during the April-June 2004 quarter was the $50 million raised by Chennai, India and New York, USA based OfficeTiger from US-based private equity firm Francisco Partners.

Founded in 1999 by investment bankers Randolph Altschuler and Joe Sigelman, OfficeTiger employs over 1,700 professionals. Its client list includes eight of the world’s 12 largest investment banks, diversified global financial services companies, leading law firms in the US and UK, consulting firms, financial and commercial printers, third-party administrators and other Fortune 500 companies.

Feroze Waheed founded Astra Business Services, a Gurgaon, India and San Francisco, USA based firm focused on collections services for the US market, raised a $4 million investment led by WestBridge Capital Partners. Feroze Waheed and other executives from the US financial services industry also participated. Sumir Chadha and K.P. Balaraj of WestBridge will join the Astra board.

The new funds will be used for developing Astra’s collections operations in India and expanding sales and marketing in the US. Astra will initially focus on late stage or contingency collections in the Healthcare and Financial Services sectors, the two largest segments of the US collections industry. Feroze Waheed, Astra’s CEO, was most recently Executive VP and CFO at Diversified Collection Services Inc. (DCS). Prior to DCS, he was a founder and EVP of Providential.

iSeva, an Bangalore, India and Irving, TX based BPO services firm, raised an undisclosed amount of funds from existing investor e4e Inc and called off its merger deal with US-based ECE Holdings.

In 2000, e4e had invested $8 million in iSeva as part of the latter’s first round of funding. Vaibhav Tewari, President of iSeva Inc., Sridhar Mitta, Managing Director of e4e India, and Murali Rangarajan, COO of e4e Group, have been appointed to the iSeva board.


VC investments in BPO during April-June 2004



Company Amount
(US$ Million)
OfficeTiger 50 Francisco Partners
Astra Business Services 4 WestBridge Capital (lead), individuals
Data Access NA e4e Inc
Source: TSJ Media

A highlight of the latest quarter was the acquisition of Daksh e-Services by IT Services giant IBM. The deal, which is valued at about $160 million, represents one of the most successful exits for VC investors in the Indian BPO industry. The Gurgaon-based Daksh, which employs over 6,000 people, is estimated to have reported revenues of about $60 million for 2003-04.

Daksh was founded in January 2000 by Sanjeev Aggarwal, Pavan Vaish, M.J. Aravind and Venkat Tadanki. The company received over $29 million in venture capital financing from Ashish Gupta (co-founder of Silicon Valley-based Junglee Inc.),, Actis (fomerly CDC Capital), General Atlantic Partners and Citibank Private Equity.

This report is brought to you by TSJ Media, which tracks VC investments in India and Indian-founded companies worldwide. Visit for more information.

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