NeoIT to invest $10 million

BANGALORE: NeoIT, the online B2B IT services marketplace for outsourcing

software development, is planning to invest US $10 million on its expansion

program in India and the US. The funds would be used for marketing,

infrastructure and human resources. The company hopes to net revenues of US $20

million for the current year. For every deal concluded through the portal, it

charges 10 per cent of the project fee from the software providers. The

consulting fee, to be collected from the buyers, could range between $5000 and

$50,000.

The online marketplace will serve as a commercial bridge linking buyers and

qualified service providers in the areas of software development and information

technology consulting. NeoIT’s market opportunity arises from the exponential

increase in the demand for IT services and the concurrent shortage of IT

professionals in developed countries, particularly the US. The company’s

proprietary technology, like neoIT RFP, neoIT Match and neoIT Track are going to

simplify the entire outsourcing process, right from request for proposal to

final delivery of software and related consulting services.

NeoIT’s chief executive officer Atul Vashistha said, "We plan to raise

the required funds of $10 million from venture capitalists (VCs). Of this, $5

million would be from US based VCs and the rest from Indian VCs. In the first

round, the company raised $2.3 million from Galladio Capital of The Netherlands,

Pole Pole Investments of the UK and Angel Investors of the US earlier this

year."

NeoIT is targeting buyers from healthcare, e-commerce, financial services,

communications and utilities from USA, Europe and Japan. Over 100 buyers are

currently registered with neoIT. This is expected to go up to 250 buyers by the

end of the year. The company hopes to reach a registration level of 2,500

solution providers from all over the globe.