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24/7 gets $22m, prowls for acquisitions

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CIOL Bureau
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BANGALORE: As the crowded Indian ITES marketplace is witnessing the consolidation of players by the mergers and acquisition route, Bangalore based 24/7 Customer is all set to shop, having acquired a funding of $22 million from Sequoia Capital.

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"We are quite seriously considering the acquisition route for inorganic growth. For this we need money and hence we were able to raise it. About $15 to 20 million would be needed for acquisition, while the rest will be used for the proposed expansion plans," said, PV Kannan, Founder and CEO of 24/7 Customer.

The company has been hiring about 250 people per month for the last five months and expects to add another 600 within the next two months to reach a total headcount of over 2000.

This is the first time, since its inception in April 2000, 24/7 Customer has gone for an external funding. Until now, the two founders- PV Kannan and Sudhakar Kosaraju, held about 84 percent stake, while the employees held 16 percent. With Sequoia Capital pumping in $22 million in the company, it has picked up about 20 percent. The founders diluted about 17 percent, while employees stake has been reduced by three percent.

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Sequoia come in with its legacy of being the early stage investors in Cisco and Flextronics. With this Michael Moritz of Sequoia Capital joined the 24/7 board. Moritz also serves as a director of several leading US corporations including Flextronics and Google.

"I've been a firm believer in outsourcing since the days of our investment in outsourced manufacturer Flextronics," said Michael Moritz, a general partner at Sequoia Capital.

This investment announcement comes just as 24/7 Customer announced a large multimillion dollar/multiyear contract with a large European insurance client for the provision of contact center and back office claims processing services. With this significant new customer addition, 24/7 Customer is on track to achieve a headcount of 2,200 by September thus continuing the well over 100% year over year growth rate experienced to date.

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