Marlabs looks at raising $40 million in PE investments to fund acquisitions

Marlabs was founded in 1996 by Siby Vadakekkara and with former iGate chief executive Phaneesh Murthy as a board member

Marlabs, a US-based information technology services company with significant delivery presence in India, is in talks with private equity (PE) investors to raise around $40 million to fund future acquisitions. 

Fou­nded by Siby Vadakekkara and with former iGate chief executive Phaneesh Murthy as a board member, it is scouting for entities working in emerging technologies, in the range of $10-15 million. “We have a few conversations going on with several PE funds for this funding,” said Vadakekkara, chairman and chief executive.

Marlabs was founded in 1996. Last year,it reported $140 million in revenue and is looking at closing this year with $155-160 million. 

“Our estimate of current revenue is purely based on organic growth, which is around 15 per cent. We are also looking at acquisitions to grow faster than this, by building digital capabilities,” said Vadakekkara, alumnus of the College of Engineering, Thiruva­nan­thapuram.

Of its 2,500 employees, it has around 1,400 in India. So far, it has been self-funded. It focuses on salesforce practice, product engineering, analytics and cloud engineering. 

“Our emphasis is on high value areas where we can bring ch­anges in the digital space for an organisation. This is mostly a non-linear pl­ay,” says the chairman. 

An innovation centre at Kochi is doing research work on the Internet of Things and related security aspects. A centre at Mysuru is majorly focused on Artificial Int­elligence-based operations. A Pune-based facility is mostly serving captives of foreign banks in the city.

IT service firms with significant Indian presence saw a spate of mergers and acquisitions in the past two years, with many PE firms infusing capital or exiting from current holdings. For instance, Aegis—a business process outsourcing (BPO) firm and the portfolio company of Capital Square Partners—announced a merger with US-based Starteck in March last year. Similarly, France-based back-office service provider Teleperformance announced plans to acquire PE major Blackstone-owned BPO services company Intelenet for around $1 billion (~6,800 crore) in June last year.