Navegar backs Series B for Australia's Cloudstaff

“We see many potential investment opportunities in outsourcing regularly and Cloudstaff is bar-none a top player in every respect, from the quality of its management team to the uniqueness of its employee culture,” Javier Infante, a managing partner at Navegar, said in a statement.

Infante and Rodelio Manansala, a partner at Navegar, have joined Cloudstaff’s seven-person board. Previous investors in the company include US-based Arafura Ventures, Australia’s PieLAB Venture Partners, and Indigo Venture Capital Partners, a Russian private equity firm focused on Asia Pacific.  

Cloudstaff offers staff outsourcing capacity in the form of office administration, project coordination, and technical support staff, as well as fully-equipped workspaces and cloud-based processes that minimize workflow interruption regardless of a team’s physical location. It claims to supply “thousands” of workers with the technology necessary to provide clients with 24-hour support.  

The company has positioned the investment as a validation of its business model in light of the coronavirus outbreak, which has seen a spike in demand for remote workforces and related services. The company – which has 10 offices across the Philippines, including seven new locations in Angeles – said it has kept its clients operational throughout the pandemic. 

“Now, we can expand our footprint and employ more cloud-based employees to meet the needs of businesses, immediately, especially during this worldwide transition from a single-office location to a work-from-home situation,” said Lloyd Ernst, Cloudstaff’s CEO. “We didn’t need a pandemic to prove we had the right technology in place, we knew our formula worked.”

Business process outsourcing (BPO) is a strong investment theme in the Philippines due to a mainly young and educated workforce, the widespread use of English, and a relatively low cost of living. The local IT BPO market alone is expected to grow by 11.5% a year through 2023, when it will reach PHP2.5 trillion ($49 billion) in revenue, according to Ken Research.

Recent activity in this space includes two investments this year by Australia’s Five V Capital in local operators MicroSourcing and Beepo. Although operationally focused on the Philippines, both companies also have strong ties to Australia. MicroSourcing was acquired from Sydney-based marketing firm Salmat, while Beepo maintains headquarters in the country. 

In 2015, Navegar invested $15 million in TaskUs, a US-based BPO player with operations in the Philippines and a tech-focused clientele including Uber, Groupon, and Tinder. It exited the company to Blackstone three years later in a deal worth $250 million.

Navegar invests middle-market companies with exposure to the Philippines and claims $300 million in assets under management. It is currently raising its second vehicle, which is targeting $150 million and achieved first close of undisclosed size early last year.

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• Topics
• Southeast Asia
• Support services
• Early-stage
• Philippines
• Australia
• Navegar
• professional services