BANGALORE: Venture capital-funded technical support services company iYogi has turned its attention to India after tasting initial success in the United States market and is targeting at least 15 per cent of the local market for support services.
The Gurgaon-based company founded by Uday Challu and Vishal Dhar in 2007, offers remote and on-the-ground technical support for desktops and laptop computers, tablets, smartphones besides commonly used devices such as printers, TVs, home theatre system or even MP3 players.
"So far, we consciously stayed away from India because we wanted the market and our company to mature, but now we feel the time has come," said Challu, who is also the chief executive officer. "Here, however we will flip our model to target small and medium businesses rather than home users like we did in the US."
Based on market research Company estimates the addressable market opportunity in India for technical support services at about Rs 10,000 crore and is aiming for at least a 15 per cent share of that market. Unlike typical technical support service providers, iYogi has a proprietary technology platform, which helps it do troubleshooting remotely.
With about a little under $100 million (Rs 540 crore) in sales, Challu said that iYogi is profitable and generating enough cash to fund its operations. So far, the company has raised $72 million in funding from venture capital firms including Sequoia, Canaan Partners, SVB Capital Partners, SAP Ventures and Draper Fisher Jurvetson.
"This is a highly competitive market to operate within," said Swati Sasmal, vice-president at AMI Partners, a technology market researcher. "The Indian small and medium businesses community is highly scattered geographically and hence it is imperative for any player targeting this segment to have a well-regulated channel partner network."
Besides internet-based sales and tying up with device-makers, iYogi plans to work with value added resellers to leverage their existing relationships with small businesses. Competitors of iYogi also said that mastering the Indian market is not an easy task.
"The challenge for a newcomer will be in gaining mindshare among clients and navigating a very fragmented market," said Ranjan Chopra, managing director at Team Computers, which offers technical support services. Chopra did not think that iYogi's experience in the US will come in handy in India because the customer expectations here are drastically different. Also adding to the challenges, according to him, is the fact that competition has brought down service charges to rock bottom levels, squeezing profits out of the market.
Currently, the iYogi employs some 5,000 people globally and supports over two million users across United States, the United Kingdom, Canada, Australia, and UAE.
The company had plans to raise about $125 million via initial public offering of shares on a US stock exchange, but had recently pulled out recently citing slugging market conditions.
"From a preparedness point, we are ready whenever the market is," said Challu, according to whom the listing is partly an exit opportunity for investors, and partly a fundraising exercise. Of the $72 million raised so far, only about $12 million have been invested for more than 3 years, and there is no immediate pressure of investors wanting to exit according to him.