Companies
‘ChrysCapital will increasingly focus on B2B enterprise tech’
Summary
- ChrysCapital Advisors managing director Akshat Babbar says the homegrown PE investor is actively exploring multiple areas within enterprise tech
MUMBAI : Homegrown private equity (PE) investor ChrysCapital, which has harvested 6x from its investment in healthcare-focused business process outsourcing (BPO) firm GeBBS, will increasingly focus on business-to-business (B2B) enterprise tech companies, a senior fund official said.
“We are quite actively exploring multiple areas within enterprise tech," said Akshat Babbar, managing director of ChrysCapital Advisors, adding that the company has historically done well in IT (information technology) services, one of its mainstays, and it would continue to look for new opportunities there.
“Within it, we are focusing a lot more on new-age digital services, and we are not spending as much energy on looking at companies that are focused on legacy technologies," Babbar said.
Also read | ChrysCapital to bet big on branded healthcare in India, says managing director Raghav Ramdev
On the B2B side, the firm will focus more on the SaaS (software-as-a-service) front as it ends up catering to the global markets, according to Babbar. “SaaS has been a more recent initiative in the last few years, and we did our first deal in SaaS late last year in a company called ProHance. We have been very closely monitoring the SaaS ecosystem out of India, where we are seeing a lot of new companies emerge and scale," he added.
On the consumer tech side, the firm focuses on high-growth companies that are either profitable or are close to achieving profitability. “We typically prefer to come in as the last round of funding for a company before its IPO (initial public offering). It might be two to three years away and not imminent," Babbar said. The firm has invested in consumer tech companies such as Firstcry, Awfis and Dream Sports, among others.
The GeBBS deal
On Monday, ChrysCapital said it has sold a controlling stake in GeBBS to global private equity firm EQT Private Capital Asia. Although the firms did not disclose the terms of the deal, people aware of the matter said the deal valued the company at $850 million, which is a 6x return on its $140 million investment in the company in 2018.
Founded in 2005, GeBBS offers a range of services that help US-based healthcare providers improve their financial performance by optimizing revenue cycle management (RCM) processes and ensuring accurate coding and billing practices.
GeBBS has grown over the years through bolt-on acquisitions, which is one of the new ways in which PE firms are adding value to their portfolio firms. The company bulked up its top line and filled business gaps by making strategic investments in companies such as Aviacode in 2021, CPa in 2023, MRA in 2023 and CCD Health in 2024.
The company has delivery centres in India, the Philippines, the US and the Dominican Republic.
Read more | ChrysCapital invests $100 million in eyecare chain Centre for Sight
“We helped the company move its focus away from dealing with channel partners," Babbar said. “Today, almost 90% of the company’s business comes from direct clients."
According to Babbar, healthcare is one of the most insulated sectors from the artificial intelligence (AI) and automation risk and is poised to grow manifold. “Hence, we have seen so much buyer interest for this deal," said Babbar.
The EQT view
EQT outbid firms such as Hillhouse Investment and others in the race to acquire GeBBS. This is EQT’s 14th investment in India. It has so far invested in marquee companies such as HDFC Credila, India IVF, Indium, Coforge, AIG Hospitals and Citius Tech, among others.
Hari Gopalakrishnan, partner in the EQT Private Capital Asia advisory team and head of EQT Private Capital India, said, “Healthcare technology is a key investment theme for EQT. GeBBS has developed a robust business with a clear focus on supporting healthcare providers through industry-leading solutions. We see strong alignment between GeBBS’s growth ambitions and EQT’s experience in creating long-term value."
EQT’s global partner told Mint in an interview earlier this year that India continues to be one of the most important markets for the firm and that it would be looking to put as much as $5 billion in the Indian market in the current financial year, essentially doubling its investment of $2 billion in 2023.
With this transaction, BPEA Private Equity Fund VIII, the vehicle from which EQT invested in GeBBs, is expected to be 70-75% invested, the firm said in a statement.
