Venture Capital and Private Equity firms announced investments of US$46 million in four India-based Business Process Outsourcing (BPO) companies during the quarter ended March 31, 2004. The quantum of funds invested was more than that during the October-December 2003 quarter (which saw US$40.6 million being invested).
The largest BPO investment during the quarter was the $30 million that Oak Investment Partners put into Sutherland Global Services. Founded in 1986 by Dilip R. Vellodi, Sutherland currently serves 36 clients including AT&T Wireless and Hewlett-Packard. The company expects to report revenues of $150 million by the end of 2004. Sutherland plans to expand the number of employees at its centers in Chennai and Mumbai from the current 3,200 to 5,500 over the next 15 months.
Sutherland was followed by Bangalore-based Reach Technologies which raised a $7 million investment from Nadathur Holdings and Investments to set up a subsidiary company that would provide CAD-based apparel designs to global apparel retailers. Nadathur Holdings, an existing investor in Reach, is a private equity firm set up by Infosys Technologies’ co-founder N.S.Raghavan.
Bangalore-based offshore equity research company Crescent Research received the third largest BPO investment during the quarter with a $6 million first round investment from US private equity firm Citron Capital.
Crescent was followed by Mumbai-based Datamatics Technologies with a $3 million investment from IL&FS Investment Managers in return for a minority stake in the company.
VC investments in BPO during January-March 2004
|Sutherland Global Services||30||Oak Investment Partners|
|Reach Tech||7||Nadathur Holdings and Investments|
|Crescent Research||6||Citron Capital|
|Datamatics Technologies||3||IL&FS Investment Managers|
This report is brought to you by the TSJ Media, which tracks VC investments in India and Indian-founded companies worldwide.