Silicon Valley VC firm invests in Indian call center

San Jose Mercury News--July 24, 2003

BANGALORE, India (AP) - Silicon Valley venture capital firm Sequoia Capital, which funded technology giants like Yahoo, Oracle and Cisco, has put US$22 million into Indian call center firm 24/7 Customer, company officials said Thursday.

The investment will fund the Indian firm's expansion plans, including acquisition and hiring, P. V. Kannan, CEO of 24/7 Customer, told reporters.

The company employs 1,800 people and handles 2 million customer calls per month for its customers, mainly from the United States. It plans to hire 400 more people in the next two months.

Within a year, 24/7 will buy another call center firm employing around 1,000 people, Kannan said, without giving details. The acquisition would help speed growth and reduce the time it takes to start catering to a new client, he said.

Kannan and two other founders have invested US$7 million so far in their company.

Sequoia's information technology specialist Michael Moritz has joined 24/7's board as a director.

U.S firms, seeking to cut costs and provide round-the-clock service to customers, have increasingly subcontracted call center operations to Indian outsourcing firms.

With a large English-speaking population and low wages, Indian firms have been able to save 50 percent or more for their U.S customers. These firms are expected to earn US$3.6 billion in the financial year ending March 2004.

In a statement, Moritz credited 24/7 with offering U.S companies "unmatched outsourcing service excellence and cost reduction opportunities."

The Menlo Park, California-based Sequoia has also invested in Apple, Symantec, Network Appliance and Vitesse Semiconductor, a company statement said.