Capital Square secures post-merger India IT services deal

The commitment comes from a USD 700m fund established earlier this year with backing from HarbourVest Partners, NewQuest Capital Partners, and Committed Advisors. It is a continuation vehicle comprising the entire BTP portfolio and certain CSP assets, but about one-third of the corpus was earmarked for follow-on and new investments.

Relevance Lab represents a follow-on transaction. The company was one of six BTP assets wrapped into a continuation fund supported by NewQuest and Committed in 2018. Three of those assets have since been wholly or largely exited.

The CSP-BTP fund is managed by an amalgamated team. Two members will join the Relevance Lab board: Sanjay Chakrabarty, one of the three original managing partners at CSP, and Rajeev Srivastava, a serial entrepreneur and founder of BTP. Both have experience in IT services. In 2016, CSP acquired India-based Indecomm Global Services, which had received its first investment from Srivastava.

Established in 2011 by India-based Soumendra Das and Puneet Chaddah, Relevant Lab describes itself as a specialised IT services player with competence in areas like DevOps (which combines software development and IT operations), automation, cloud services, digital transformation, and agile analytics. It has over 1,500 employees across North America, India, and Ethiopia.

The company is itself the product of a merger. In January, Relevance Lab revealed that it had joined forces with Cignex and Excellerent. The union combined Relevance Lab’s expertise in DevOps and automation with Cignex’s background in open-source technologies and the cloud and Excellerent’s abilities in agile engineering and its relatively unusual Ethiopia presence.

Vasu Sarangapani, who previously held several senior positions at GlobalLogic, was recruited to serve as president and CEO of the merged entity. He noted in a statement that CSP’s investment will be used to accelerate business growth in existing core markets and to identify M&A opportunities.

"Our core competency is in bringing small to mid-sized companies together under a unified platform and accelerating growth. We believe that this strategic merger, along with Vasu as President & CEO, provides the necessary impetus to scale Relevance Lab,” Srivastava added.

The US-India corridor in IT services has proved an attractive hunting ground for private equity investors. Recent transactions include ChrysCapital Partners purchasing Xoriant, a US-headquartered but primarily India-based software engineering and IT provider, and Everstone Capital and Goldman Sachs Asset Management buying IT consulting player Cprime.

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• Topics
• South Asia
• Technology
• Expansion
• North America
• India
• USA
• Capital Square Partners
• Basil Partners
• IT services