Viteos, which earned $26.5 million in revenue last fiscal year with roughly 400 employees, will retain its brand identity to strengthen its presence among clients
Bengaluru: Wipro Ltd has agreed to buy Viteos Group, a securities processing and fund administration services provider, for $130 million in an effort to expand its portfolio of services to financial companies.
The 12-year-old New Jersey-based Viteos provides services including processing, reconciliation of trade, settlements and customer data across asset classes and currencies for investment banking clients in the US, Europe and Asia.
Wipro plans to use Viteos’s licensing platform to offer services to buy-side companies, a term used by investment bankers to refer to institutions that buy investment services such as mutual funds, pension funds and insurers.
“Viteos is definitely the type of acquisition Wipro BPO needs to be making to make the shift to more “as-a-service" based solutions," said Phil Fersht, chief executive of US-based HfS Research, an outsourcing-research firm.
“However, the litmus test for Wipro will be how successfully can it scale up the Viteos software platform with its existing and new clients."
Wipro, India’s third-largest software exporter, already offers many of these solutions to its clients on the sell-side of capital markets.
They, in turn, sell investment services to asset management companies.
“Viteos will further our strategy in the capital markets domain," said Shaji Farooq, president and chief executive of finance solutions at Wipro.
Viteos, which generated $26.5 million in revenue in the year ended March with roughly 400 employees, will retain its brand identity to further strengthen its presence among existing clients and expand its offerings into the larger asset management industry with Wipro’s backing.
Wipro will also retain the US company’s leadership team to drive platform-based outsourcing business services.
The acquisition reflects a broader shift in India’s software outsourcing industry towards building an arsenal of intellectual property-led high-margin software platforms rather than relying on an army of engineers to offer technology solutions to clients.
Rival Infosys Ltd, which has in the past been coy about making acquisitions, has also joined the fray to acquire new technologies to build a portfolio of high-margin software platforms.
In 2015, Infosys bought three companies—Panaya, an automation software firm, Skava, a mobile commerce platform and Noah Consulting, a consulting provider for the energy and utilities segment.
Wipro has not shied away from acquisitions, having spent more than $1 billion in the past 10 years to acquire companies as part of its “string of pearls" strategy. Earlier this year, it bought Denmark-based technology design specialist Designit for $95 million to strengthen its digital technologies solutions.
Wipro and Infosys have also been investing heavily in start-ups to build new-age technology solutions for clients.