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Software Paradigms International (SPI), a provider of solutions and services for the retail sector, is looking at raising up to $150 million in private equity (PE) funding.
The company, which has significant offshore delivery presence in Mysuru and caters to most of the global retail majors such as Walmart, Carrefour, Macy's, Napa, Saks and Ahold, is in initial talks with a few private equity (PE) players hoping to close the same by the end of this year, SPI's founder and chief executive officer Sid Mookerji told Business Standard. "We're planning to raise anywhere between $50 and $150 million. It's a broad range but depending on whether it is leverage, minority or majority (dilution of equity), we might do that. It also depends on who is (the investor) coming in and whether the investor understands the business and wants to play on; we're not even afraid to dilute majority equity."
Founded in 1994, SPI has its largest global delivery centre located in Mysuru, where 1,000 out of its global employee base of around 1,500 are located. The company's compounded annual growth rate (CAGR) during the past 10 years was 30 per cent while in the past five years, it has grown four times. In the ongoing calendar, it is expecting to cross $100 million in revenues, which will make it the first company in Karnataka, located outside of Bengaluru, to achieve this milestone. The company's revenue in 2014 is estimated to be in the range of $80 million.
"When we're growing so fast, it's time for us to get to the next level. So, the PE funding might happen sometime in 2015. If we continue to grow by 400 per cent over the next four years, that will take us to a size where we will compete with some of the biggest names in the industry," added Mookerji, an alumnus of Birla Institute of Technology and Science, Pilani.
So far, the company has not tapped any external funding. However, Mookerji says it was not because the company did not want to take any risk but he did not want to lose out by taking uncalculated steps. "For me, the biggest guiding philosophy was, I never took any risk that I could afford to lose. As an entrepreneur, you have to take chances. And I have also taken very big risks, always."
In the current year, SPI plans to make two more acquisitions, which will not only help in enhancing its software product bouquets but also in expanding geographical spread, especially in Europe where its presence is relatively smaller. One of the two could be in the mobility space, which will expand the company's solutions for e-commerce companies.
Since 2006, when the company decided to activate its inorganic growth pursuit, SPI has made eight acquisitions which are mostly around intellectual properties (IP). So far in 2015, the company has made two acquisitions including Direct Tech, a US-based merchandise and inventory planning company, and QwikCart, a provider of mobile and e-commerce solutions for retailers.
"Most people in the industry do everything for everybody. So we chose to focus on one single vertical - retail. And, so we bought a lot of companies that have IP or products in the retails space," said Mookerji.
