KPO firm scouts for strategic investments

Wipro might evaluate option.

Aranca, a four-year-old knowledge processing firm, is looking at various strategic investors to sustain its growth strategy.

According to industry sources, the company is in various stages of negotiations with three firms and Wipro might also look at coming into the picture.

Aranca is a 150-people organisation based in Mumbai, and is looking at doubling its strength. So far, it has sustained its operations with investments from promoters and angel investors.

It was started by Hemendra Aran, who was earlier with Infosys. The company leverages on offshoring research to India and provides investment, business and economic research services.

A spokesperson for Aranca said: "As part of our strategic plans, we are looking to invest in strengthening our capabilities across all functions "� business development, marketing, delivery capacity and several others. To enable this, we are looking to identify an investment partner who can provide strategic value to the business in addition to funds."

He further added that Aranca was not looking at a total sell-out. Wipro, on its part, said that it does comment on speculations in the marketplace.

On the potential for growth in the KPO industry, Aranca said: "We have grown at over 200 per cent compound annual growth rate (CAGR) and we expect to sustain this pace over the next few years. We see immense growth potential in our existing lines of business and intend to expand into newer areas as well in due course."

The KPO space has been gaining in prominence over the last few quarters with various global organisations employing the services of KPO service providers to sharpen their market focus.

In fact, WNS recently signed a letter of intent to acquire Marketics, a Bangalore-based KPO, for $65 million. It is understood that Wipro was also in the race to acquire this company.

During the last six months, Wipro has been scouting for a buyout in the KPO space in an effort to build up value in its BPO arm, changing its earlier profile of depending on voice-based services.

Wipro is looking at increasing its thrust on knowledge services which includes higher value added activities like research and analytics.

The company recently hired Ramit Sethi as senior vice-president, knowledge services and capital markets, from Infosys BPO to bolster this vertical. The mandate was to focus on consolidating and grow Wipro BPO's capital markets and knowledge services business.