DAKSH eSERVICES: Where Eagles Dare

FACT FILE CEO Sanjeev Agarwal POSITIONING Primarily a customer service company STARTED IN Jun-05 OWNERSHIP CDC Capital, Citigroup, General Atlantic Partners TOTAL FUNDING $28 mn REVENUE (2002-03) $ 29.5 mn NO OF PEOPLE 5,000 + (as on 31 Oct 2003) CORPORATE ADDRESS 186 Udyog Vihar, Gurgaon, Haryana WEBSITE www.daksh.com NO OF CLIENTS 12

COPC certified Benchmarked by John Anton

LOCATION

FACILITIES: 5 (Gurgaon–4, Mumbai–1) SALES & MARKETING: New York & Florida (US), London (UK)

Daksh in many ways represents the aspiration of Indian
entrepreneurs. It was started by people who did not come from a financial
services company doing or considering offshoring to India. These were a bunch of
people who read the opportunity, started with an idea, a plan, and a lot of
spirit, and–most significantly–no direct association with a potential
outsourcer. Yet, they have not only survived but have grown to become one of the
few top-bracket companies.

More admirably, Daksh is one of the few companies in the bpOrbit
Top 15 club that do not have or did not ever have a direct ownership by any big
corporate! It is an out-and-out VC-funded company.

And look at the kind and number of VCs it has been able to
attract successfully! CDC, Citicorp, General Atlantic Partners–the biggest
names in private equity. What’s more, the funding has been at regular
intervals with Daksh among the very few companies to be able to raise the third
round of funding of an impressive $20 million.

This has given Daksh a unique positioning among the VC-funded
companies that are dreaming to grow independently. Daksh has been tipped among
the few companies to make it to the $100 million revenue mark by 2005, which if
it does will be an impressive show.

The company has been talking of nothing less than an IPO. It
remains to be seen, though, whether it can actually do that successfully. Apart
from the $50-100 million IPO within a year or so, that Daksh has been talking
about, it has also been actively looking for acquisition, within or outside the
country for rapid ramp-up. Daksh has appointed Kotak Mahindra to look for a
possible acquisition in Philippines, Malaysia or Mauritius. If listed, it would
be the first BPO company that would grow to an IPO.

While Daksh has a few big clients like Amazon, Yahoo and Sprint
to show, as a testimony of its ability to execute, what has made it a stable
company is its emphasis on organization building and good corporate citizenship.
The company has emerged # 5 in the recent Dataquest-IDC Survey on BPO Employees.
The best compliment to the company’s credit is that every single employee
surveyed said that they would recommend the company to a close friend.

What was not exactly a good thing in its financials was a heavy
dependence on one client with more than 60 percent of the revenue coming from
it. For a company of this size, it is a major risk factor. However, the company
has managed to bring down it drastically. It expects to bring that figure to
almost half at 32 percent. In fact, that has been one of the two conscious
efforts on the company’s part, the other being widening the vertical
portfolio.

From just three segments in 2002-03, to about seven by the end
of 2003-04, it can be an achievement of sorts. It recently announced its entry
into travel, a fast growing vertical.

Another interesting de-risking strategic initiative at Daksh is
the hiring of 80 German-speaking Indians to service that market.

By reiterating time and again that it would remain independent,
Daksh leads the companies who dare to dream. It’s success or failure to ensure
a good IPO would in many ways set the tone for the next phase of growth in the
Indian BPO industry.