24/7, Indecomm win VC funding mandate

TIMES NEWS NETWORK--FRIDAY, JULY 25, 2003 02:32:50 AM

BANGALORE: BPO Companies seem to have caught the fancy of VC funds. While 24/7 Customer on Thursday said it has closed a first round of $22 million from Sequoia Capital and the company’s founder P Kannan, another operator, Indecomm Global Services, has got $5 million from West Bridge Capital Partners (WBCP) and Acer Venture Capital.

24/7 Customer will use this funding to pursue key sales initiatives and global expansion activities including BPO acquisitions, according to an official release. 24/7 Customer currently has 10 customers and is profitable.

Mr P V Kannan founder and CEO of the operator, told ET that 24/7 is looking at several local players as potential take-over targets. It had lost out to ICICIOneSource in the race to acquire Bangalore-based FirstRing. Currently 24/7 has around 1,900 employees and 1,200 seats, he added.

Mr Kannan claimed that the company closed last fiscal with a revenue of $15 million and is looking to reach $30 million this financial year.

This announcement comes close on the heels of 24/7 Customer bagging a multi million dollar multi year contract with a European insurance provider, for contact centre and back office claims processing. With this new customer addition, 24/7 Customer is on track to achieve a headcount of 2,200 by September, according to an official release.

Mr Michael Moritz of Sequoia Capital has joined the 24/7 Customer’s board of directors. Mr Moritz is currently a director of several US corporations including Flextronics and Google. Sequoia Capital was formed in 1972 and has funded companies such as Cisco Systems, Apple Computer, Yahoo and Linear Technology.

Meanwhile, Mr K P Ponappa, CEO and founder, Indecomm, said that “the timely injection of funds into Indecomm Global Services will be used to unlock the growth potential that has already been established through proven pilots with US based customers.”

Indecomm provides a range of back office processing services to the healthcare sector and also supports this with its own proprietary software offerings.

The company is said to have around 500 seats and roughly 600 employees across two centres.

Mr K P Balraj, managing partner at WBCP, said the fund was looking to invest in focused plays, in a rapidly maturing BPO environment. He said Indecomm’s strong customer base and software capabilities, along with its “defensible” area of operations made it an ideal target for VC funds such as WBCP. It manages around $140 million in institutional capital. The firm’s investor base includes Goldman Sachs, SUN Technology and Capital Z Investments. WBCP’s investments include Strand Genomics, Zenasis technologies, July Systems, FirstRing, Tarang Software, Celetron Systems and Emagia Corporation.