24/7 to acquire US entity soon

24/7 Customer, one of the better known third party BPO service providers in the country, will acquire a US counterpart in the next one month's time.

According to Shanmugam Nagarajan, founder and COO of the organisation, the management which has been working on acquisition possibilities for over eight months and has finally narrowed down the choices to two players and will take a decision within 30 days.

"We are planning a maximum investment of $20 million for the acquisition, which will be either a US company or one which has BPO operations in that country with around 1,000 people on its rolls. We are looking at the two choices to decide who will best complement the services that we offer at present. We are also looking for strengths in languages apart from English, specifically Spanish, such that it would expand our service offerings," said Nagarajan.

In its effort to broaden its services in other languages, the company set up a German and French technical helpdesk in its Bangalore office a month back.

"The operation is pretty small, around 10 people in each of the languages and it is fashioned more on the lines of an experiment at the moment. The client, who is new to us and was signed on for English services, was willing to let us provide these additional language services for a three month period," Nagarajan said.

He expects $5 million of a targeted total revenue of $50 million to come from other language services this fiscal. He also estimates that even at maximum scalability, which would be reached within three years time, these other language services from India would comprise only 10 per cent of the total service offerings.

Replying to a query on why the BPO industry in India has not actively moved into European markets, Nagarajan said, "As a country we are good in English and we can scale easily there. So obviously the industry has gone for the lowest hanging fruits first and tapped into existing demand for English services. Also, a European focus will demand not only quality people who are well-versed in the specific language but also a whole support system around them. This requires investment. Therefore, most BPO companies are consciously trying to saturate the existing market, before venturing into these new areas."

The company also announced on Monday plans to add 1000 new jobs in Chennai, over the next 6 to 9 months. The Chennai facility, which is the third location after Bangalore and Hyderabad will begin with a capacity of 250 seats and be expanded to 500 seats over the next six months.

Around $5 million has been earmarked as initial investment.

24/7 Customer, which was started in 2000 and has 3,500 employees on its rolls, recorded revenues of Rs 132 crore in fiscal '04 as opposed to just Rs 30 crore in fiscal '03. Attrition for the year was 22 per cent, lower than the industry average due to proactive HR measures including management courses for employees.

The company plans to close the financial year with 7,000 employees and a campus of its own in Bangalore. The company received a $22 million funding from Sequoia Capital to fund growth and expansion in June 2003.