I am happy to share that we have led an investment round of $6MN in UnitedLex with Helion. UnitedLex is a legal consulting and outsourcing firm. Sahad has covered some numbers on broad KPO market in his posts.
Since last 12-18 months, we came across many companies in the broad KPO market – Legal Outsourcing, Financial Analytics, Market Research etc. We believe that ability to scale and sustain growth will become a key success factor in the KPO space. While on sales side, one needs a good sales engine which can close deals in the competitive and fragmented US market. W.r.t delivery, you need ability to drive efficiency by bringing more and more processes on a technology platform. UnitedLex has been able to excel both on sales and delivery front and we hope to help build this into a big business.
-Mukul
- Onion Rs65/kg, Petrol Rs65/litre, Beer Rs65! - January 19, 2011
- NEN Program for Women Entrepreneurs - September 3, 2010
- A Billion Dollar Indian Internet Company - August 19, 2010
Vivek – Typically, in a fast growing company Cash Cycle and Revenue Cycle are pretty different. Take an example: Company booked $4M last quarter and targetting $6MN this quarter. You don’t get payment as you deliver services; typically there is a receivable cycle of 60-90 days. So Revenue booked of $4MN in Q1 will come in Q2. But you have to put money in expanding capacity upfront, hire people and plan for Q3, Q4 etc. So you need money.
This is just one example and there can be many other reasons for why you need money.
-Mukul
Alok,
Glad you got back. I had in fact one of your comments under an earlier post (can’t exactly recall which) in mind as I wrote that. Your argument was that “service companies are not so much in the VC radar since they have little or no IP assets – hence low residual value”.
May be now the context has changed. But I am certainly glad about the developments, especially I-Yogi. Congratulations!!
Krish – when did VCs have a fixation for product companies!? 🙂 I think we are still waiting for that phase to come in. Unitedlex is definitely a more mature company than most of Series A investments we make, but what makes it distinctive is the team – its one of the most well-rounded teams I have seen around at early stage.
I do believe that the services story is going to keep unfolding along two dimensions:
Congratulations !!
Being a second round, it must be a very mature company. Would it be safe to presume VCs have shed their fixation with product companies? In particular, when we have so many service providers around with tremendous scaling potential, the earlier investor bias for product companies was quite irksome. I know of quite a few promising service startups that had to be told off because of investor apathy. Now I guess at least some of them could luck out – in case if they are lucky to be alive and kicking 😉
Congratulations to all involved.
>> The company has a $10 million annual revenue run rate, up from just $4 million at the end of 2007. The company claims that its revenues are growing at by 5 to 10 per cent on a month-on-month basis and it’s expecting $22 million revenues by 2009. >>
Wonder why such a cash flow positive service-heavy company would opt for venture capital. Other than the $2M they require for their Lex Base technology platform, their requirements are similar to any other IT services company.