TechTribe gets funding from 3 PE funds including Canaan Partners

Canaan Partners, a $2.4 billion global venture capital firm, today announced it has led a joint investment with The Entrepreneur's Funds and Miven Venture Partners in techTribe, India's leading career networking portal as reported by PRWeb.

techTribe is a software company that enables current and future Indian technology professionals to enhance their careers through social networking. The investment will be used to expand techTribe's sales and marketing infrastructure in India and to drive new revenue growth. Alok Mittal, Canaan's managing director in India, will be named to the techTribe board of directors.

The Indian career networking market for middle- and senior-level executives is worth $400 million, according to techTribe, which has operations in San Francisco and New Delhi.

Canaan Partners is a leading global venture capital firm specializing in early-stage information technology and life sciences investments. Founded in 1987, Canaan Partners has $2.4 billion capital under management and has invested in more than 240 companies, completed 63 mergers and acquisitions, and brought over 50 companies public.

The Entrepreneurs' Fund III (TEF3) is a Silicon Valley based, early stage venture fund focused on Software and Healthcare startups. Miven Venture Partners, founded in 2005, is a multi-stage venture capital firm with a primary focus on investing in consumer related technology companies.

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Nasscom floats a 100 cr VC fund for IT start-ups

In December 2005, Nasscom wanted the Union Government to set up a separate venture fund to fuel innovation in the software products space.

A year and a half later Nasscom is set to launch a Venture Fund, with a corpus of Rs.100 crs, along with Hyderabad-based ICICI Knowledge Park, an arm of the ICICI bank.

Disclosing this to CyberMedia News here, Rajdeep Sehrawat, vice president of Nasscom, said “We have earmarked Rs 100 crore to fund IT start-ups in India, which are involved in IP-creation. These companies could be anyone who is working on automotive electronics, wireless and broadband, life sciences, medical devices and the like.”

The venture fund is expected to be in place by October this year. The fund will be looking at disbursing seed capital or angel funding, which other venture capital firms hesitate to enter. It intends to finance early start-ups, in their ideation stage, as this is where the liquidity crunch is felt the most.

Such initiatives promise to offer a lot of opportunities to an entrepreneurial mind. One hopes to see more such initiatives being taken in the future.

Argonaut leads $80 million funding of Cordy's

Cordys Holding B.V., provider of industry-leading business process management suite (BPMS) enterprise software, announced the successful completion of $80 million equity financing representing the singlw largest round of funding for an independent, private BPMS vendor.

Argonaut Private Equity led the round with an investment of $67 million securing a 'significant minority stake' in the company, which could be anywhere between 20 and 33 percent.

Headquartered in the Netherlands, Cordys is a global company with over 520 employees in offices in the Americas, Europe, China and India. Cordys currently employs 250 people at its Asia development centre in Hyderabad which is the key to its ability to compete with larger incumbents,

With more than $2 billion under management, Argonaut Private Equity is a diversified global private equity fund. 'This investment in Cordys demonstrates Argonaut's commitment to investing in high potential business with strong ties to India,' said Gagan Kapur, vice president, Argonaut Private Equity. With the investment in Cordys, the total investment by Argonaut in India has reached $170 million in diverse markets.

BMPS' are the next generation of BPM software. BMPS' pull together a broader set of tools to provide end-to-end lifecycle support of the business process all within a single model that is shared by all its enabling technologies.

SRIT to acquire Agilent Technologies arm OSI

Sobha Renaissance Information Technology (SRIT), a Bangalore-based software company, is acquiring Objective System Integrators (OSI), a division of the $5 bn-test and measurement company Agilent Technologies, for an undisclosed amount. OSI will provide SRIT a strong foothold in the telecom management solutions space. The acquisition will be funded by SRIT through a combination of debt and internal accruals.

OSI provides software solutions for the integration and management of communications networks and is a major player in the operations support systems in the telecom sector. OSI was acquired by Agilent for $665 mn in 2000 when its revenues were pegged at around $70 mn. As of now, revenues of OSI are around $26-30 mn. It has around 120 people with presence in India and the US. This is SRIT’s second acquisition. Earlier, it had bought Billing Components, a German telecom software company.

SRIT focuses on three verticals, namely, healthcare, telecom and enterprises and currently has around 1500 people spread across 11 countries. It has registered revenues of around Rs. 200 crores for the FY07 and is targeting around Rs. 450 crores in FY08 with Rs. 280 crores coming in the telecom vertical. Currently, it gets 30% of its revenues from healthcare and telecom segment with the remaining from enterprises.

Read The Economic Times article.

Carlyle teams up with Ramesh Vangal to acquire Cambridge Solutions

Private equity giant Carlyle along with serial entrepreneur Ramesh Vangal are said to be the frontrunners in acquiring Cambridge Solutions, one of the largest listed BPO companies. Carlyle may purchase 42% of the other promoters’ stake for sale at $170 mn. The joint bid would control around 60% stake, valued at around $250 mn, in the acquired company, thus valuing the company at an EV of $400 mn. Other firms in the fray include bidders like global IT major EDS, PE firm Apollo and Indian IT company HCL.

The Cambridge acquisition will be Carlyle’s largest investment in India till date. The PE major is joining hands with Mr. Vangal, a co-founder and the largest individual shareholder in Cambridge with 18% stake, is assisting Carlyle in effecting a buyout.

Carlyle’s move to buy is seen in the context of Cambridge, which has substantial revenues locked up in the insurance processing domain that could unleash synergies given its rather large exposure to the insurance sector in the US. Almost two-thirds of Cambridge’s Rs. 1200 crore-revenue comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US.

Read more in The Economic Times article.
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BPO service providers Sutherland, Genpact plans IPO on US bourses

The Economic Times reports that following the lead of the listing of its peers EXL Service Holdings and WNS on NASDAQ and NYSE, respectively, Sutherland Global Services, a US-based third party BPO service provider, is planning a NYSE / NASDAQ listing by the last quarter of 2007 to raise around $250 mn. Private equity firms Oak Investment Partners and Standard Chartered Private Equity (through its Merlion Fund) are invested in Sutherland. Sutherland offers services including process consulting, back-office processing, account management, customer care, technology support across verticals such as technology, telecom, retail, healthcare and banking, financial services and insurance (BFSI). It has about 18,000 professionals on its global rolls, 50% of them based in India and has other global facilities in locations like Mexico, Canada, and the Philippines.

Meanwhile one of the India’s largest BPO firms Genpact is mulling a US listing through an initial public offering to raise over $600 mn for the company and its promoters. The company, previously part of the US-based industrial conglomerate General Electric, is planning to offload about 15% equity through a public float on NYSE / NASDAQ later this year. The company’s major shareholders, GE and US-based private equity firms Oak Hill Capital and General Atlantic, are likely to sell part of their holding through this IPO, valuing the company at around $4 bn. Genpact has appointed Morgan Stanley, JP Morgan and Citigroup for the offering and it may file the regulatory prospectus in the next few weeks.

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Zensar Technologies forms JV with Japan-based EZA

IT and BPO solutions provider Zensar Technologies Limited is forming a joint venture with Tokyo-based IT firm EZA Limited to create Zensar Advanced Technologies to further strengthen its footprint in the emerging Japanese market. The transaction would involve the transfer of all EZA’s existing order book, employees, technology, and intellectual property to the newly formed joint venture.

EZA was incorporated in 1996 and had a turnover of $4.2 mn in 2006, and brings in over 10 years of strong industry experience in Japan. The company has over the years developed products in media server, digital appliances and security space. Its customers include NEC, Japan Railways and Unisys and other retail customers. Having gained technology and domain expertise pertaining to mobile terminals over the years, EZA is now focusing to enter the digital home appliances and security markets.

Read the article in Business Standard.

Financial Technologies sells 1% in Dubai commodity bourse for $12.5 mn

Indian IT company and MCX promoter Financial Technologies has sold a 1% stake in its Middle East-based venture, the Dubai Gold and Commodities Exchange (DGCX), to its partner, the Dubai Multi Commodities Centre (DMCC). The size of the deal is around $12.5 mn valuing the year-and-a-half old DGCX at $1.25 bn. Financial Technologies would now hold a 49% stake in DGCX.

DGCX is an electronic futures and options exchange which utilizes trading, clearing and settlement technology developed by Financial Technologies. The exchange lists futures contracts in gold, silver, currencies and fuel oil. It has recently announced the imminent launch of futures contracts in steel and options contracts on gold. DGCX has also foreshadowed the future listing of various agricultural, metal, and energy products.

Read the article in Business Standard.
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ChrysCapital picks up 15% stake in telecom firm Spanco Telesystems

Networking and system integration company Spanco Telesystems has diluted a stake of 15% stake to private equity firm ChrysCapital. The financial details of the deal have not been disclosed.

Spanco expects to benefit from the domestic IT spend by telecom service providers, defence, state governments as they roll out networks, including SWANs for e governance initiatives. The company has grown revenues and profits at a CAGR of 60% and 108%, respectively over the previous three years and is well positioned to continue on its growth path paved with new initiatives in the arenas of RFiD and enhanced presence in the European and Middle Eastern markets. It has recently been awarded a 10-year, nation-wide outsourcing contract from Indian Railways.

Read The Economic Times article.

Bennett Coleman buys stake in online merchandising company eYantra

Bennett, Coleman & Company has acquired a stake in Hyderabad-based eYantra Industries, a corporate brand merchandising company. Established in 2001 by ex-PriceWaterhouseCoopers consultants, eYantra offers a range of 5000 products across 150 categories. It is headquartered in Hyderabad and has various offices in Mumbai, Delhi, Chennai and Bangalore. More than 15 corporates have partnered with eYantra for their online brand stores, and 100 such online stores are expected to be hosted by the end of this year. eYantra has entered into long term exclusive merchandising contracts with several industry majors like Tech Mahindra, TCS, Accenture, Sasken, HCL, Genpact and ING Vysya Life Insurance.

The company has been growing at a CAGR of 73%. It has now forayed into internet- and intranet-based customized online brand stores. Named eTail, this new SBU will synchronize and energize its online brand store vertical across the globe.

Read more in The Economic Times article.

Chennai-based Xtenza Solutions to form JV in Malaysia with Petrogold

Chennai-based software company Xtenza Solutions has formed a IT JV with Malaysian trading company Petrogold to tap the growing IT market in Malaysia. Petrogold would hold 51% stake in the joint venture.

Xtenza is a subsidiary of US-based Softnet Solutions, which picked up 50% stake in the company from its promoters who now hold the remaining stake. Softnet is headed by an Indian settled in the US and with about 70 employees, has revenues of about $10 mn. It offers solutions that make an organization’s supply chain more efficient by automating some of its transactions with suppliers, logistics providers, dealers and finance agents. Its major domestic customers include Hindustan Zinc, Sterlite, Eicher and L&T.

The joint venture would be based in Kuala Lumpur and would also target Singapore, Brunei, China and Indonesia, with initial thrust coming from Malaysian companies. The company is set to go on-stream by third week of April.

Read The Economic Times article for more details.

Clearstone, SVB invest $5 mn in Indian gaming portal games2win.com

Mumbai-based gaming portal Games2win.com has raised about $5 mn from leading US venture capital firms Clearstone Venture Partners and Silicon Valley Bank Financial Group. This is the company’s first round of venture capital funding, and will be used to upgrade content, hire talent, and build the brand. Games2win will distribute smartcards similar to prepaid cards for mobile phones that allow customers to pay in advance for service.

The online gamers’ population in India is estimated to be about around 3.5 mn people, and this figure is likely to grow 50-100% every year for the next 5-10 years. The growth drivers would be the rapid adoption of the Internet, increased broadband penetration, the growth in Internet cafés, and a sizable middle-class with rising disposable income.

Read more in the Red Herring article.

TCS sells 40% stake Sitel India to JV partner Sitel for $17.73 mn

Business Standard reports that Tata Consultancy Services has divested its 40% stake in the BPO firm Sitel India to US-based Sitel Corporation for $17.732 mn. Sitel India is a joint venture between the Tata Group and Sitel Corporation, formed in 2000, with both parties holding 50% of the equity. Tata International, which holds 10% stake in the JV, has also agreed to sell its stake. The joint venture company provides voice-based contact centre BPO services from India. With over 4000 professionals, the JV is a provider of fully integrated customer care and back office processing services operating from five centers in Mumbai, Hyderabad, Chennai and Gurgaon.

HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times.
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IDG Ventures India to invest $2 mn in IT company Manthan Systems

The Economic Times reports that early-stage technology venture capital fund IDG Ventures India is making its first investment of $2 mn, out of a total fund size of $150 mn, in Manthan Systems. Manthan is a retail industry focused business intelligence and analytics software products company. The money raised from IDG Ventures would be utilized to build the sales team and product development teams. IDG Ventures Vice-Chairman and Managing Director India Sudhir Sethi will join the Board of Directors of Manthan Systems.

Cargill Ventures invest $9 mn in IT firm KPIT Cummins

Cargill Ventures, the venture capital arm of Cargill, Inc., will invest a total of $9 mn in Indian IT consulting firm KPIT Cummins Infosystems. KPIT Cummins will issue shares of $4.5 mn on a preferential basis, in addition to warrants convertible into shares of up to $4.5 mn. The warrants will be convertible into shares at the end of 18 months from the date of issue-based on certain parameters.

Cargill is a privately held company with operations in 63 countries and revenues of over $75 bn. Cargill Ventures is a diversified growth-capital investor across the IT, life sciences and IT sectors.

Read more in the Business Standard article.

IFC invests $5 mn in rural banking-focused IT firm FINO

The World Bank PE arm, International Finance Corporation (IFC), will invest up to $5 mn in Financial Information Network & Operations (FINO), a technology service provider offering end-to-end IT solutions that help banks reach under-served rural markets in India. The investment comprises common equity of up to $2.5 mn and convertible preferred shares of up to $2.5 mn.

In India, IFC’s outstanding portfolio is $1.3 bn (as of June 2006) making it IFC’s fourth-largest country of operations. As the private sector arm of the World Bank Group, IFC has been showing interest to develop the Indian rural banking market.

Read The Economic Times article.

Chennai-based IT firm Quintegra acquires firms in US, Singapore

Chennai-based listed software firm Quintegra Solutions has acquired US-based ValleyUS and Jadelite Technologies of Singapore for a total consideration of $ 10.5 mn (Rs. 46.50 crores). ValleyUS cost $9.5 mn, while the Singapore firm $1 mn.

ValleyUS is focused on domains like client-server, legacy, CRM and e-commerce. It has partnership with big five IT consulting firms in the Silicon Valley. Its major client is publishing house CTB McGraw Hill. Others are EBay, Wal-Mart, E-trade, Wells Fargo Bank, Yahoo, Google and BEA Systems. The acquisition of JadeLite, which has award-winning ERP for educational sector, is expected to improve Quintegra’s market share in the education and training management software.

Quintegra had raised a loan of $5 mn from State Bank of India for part funding the takeover of ValleyUS. The balance amount is to be paid on an earn-out model over a period linked to the firm achieving certain milestones. The takeovers will increase his people strength to 600 from the current 400.

The US market accounts for bulk of company’s revenues and the takeover of ValleyUS has synergies to strengthen its presence there. The US firm had clocked revenues of Rs. 53 crores ($12 mn) for the year ended March 31, 2006 and it is projected to achieve Rs. 80 crores ($18 mn) in 2007-08. The Singapore firm is expected to achieve revenues of Rs. 80 to Rs. 90 crores in the next three years.

Read the article in The Economic Times.

The Times Group acquires 5% stake in Ahmedabad-based IT firm

Bennett, Coleman & Company (BCCL) will acquire around 5% stake in Ahmedabad-based IT firm Sai InfoSystem (SIS), for an undisclosed sum. SIS offers total IT solutions to end users comprising hardware, software, networking and related services. It operates in the area of system integration, call-centre solutions and has been focusing on four verticals namely telecom, power, defence and the state government, and has added two more verticals, retail and gaming.

The company may come up with an initial public offering in three years.

Read The Economic Times article.

NYSE-listed Indian BPO major WNS acquires Bangalore-based KPO Marketics Technologies for $65 mn

NYSE-listed WNS Holdings, one of India’s leading Indian outsourcing companies, will acquire Bangalore-based analytics services firm Marketics Technologies for $65 mn in an all-cash deal to consolidate its position in the fast-growing knowledge processing arena. The acquisition will supplement the knowledge business of WNS which provides market research, business and financial research, and analytics services. The existing clients of WNS are in the travel, banking, financial services and insurance industries. With the Marketics acquisition, WNS will add capability in the consumer goods, retail, and media and entertainment sectors. Marketics was started in 2003 by a group of young professionals with backgrounds in marketing, market research and information technology.

WNS will pay $30 mn at the closing of the deal and an additional earn-out payment of up to $35 mn over a 12-month period, financing the acquisition off its balance sheet. WNS has already made three acquisitions: Town and Country Assistance, an auto claims collection firm; ClaimsBPO, the India-based healthcare BPO business of GreenSnow from the US; and an Arizona-based mortgage BPO firm called Trinity Partners. Leading domestic investment bank Avendus Advisors was the advisor to the transaction.

Read more in FinanceAsia.com.