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August 17, 2000
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MindTree Consulting plans to spread wings

Fakir Chand in Bangalore

MindTree Consulting Limited, the Bangalore-based international consulting company, is embarking on an expansion spree within a year of its existence, to capitalise on the growing e-business solutions and networking technologies market worldwide.

Having made a significant mark in the IT world with a record 27 customers in the areas of its expertise, and two world class software development facilities at Bangalore and New Jersey in the US, the high-end technology start-up is creating a soft infrastructure with the help of its knowledge management system for entering into new geographies to target Fortune 500 firms.

In the run-up, the company is setting up yet another state-of-the-art facility 'MindTree III' on the outskirts of Bangalore to add around 55,000 sq ft of work space to accommodate an additional 440 software developers. With this, the company would have made a capital expenditure of Rs 120 million in its infrastructure and development facilities over the year.

Giving a fact-sheet of the company's performance since its inception a year ago, chairman Ashok Soota claimed on Thursday that MindTree's revenues would not only exceed $15 million at the end of March 31, 2001, but also break-even at the end of its first and current financial year of operations itself.

"The revenue estimates are right on the track and will scale as planned to achieve a projected target of $123 million by 2005 as envisioned when the company was conceived as a start-up."

With an initial funding of $9.5 million from founder promoters, the US-based Walden International, and the Bangalore-based Global Technology Ventures (formerly Sivan Securities) taking care of MindTree's upfront investments over the year, Soota said the cash flows and income generations have been buoyant enough to think over the second round of funding presently.

"There is neither dearth of funds nor cash to go for the next round of funding. We may consider that option sometime during the fourth quarter of the current fiscal year," Soota asserted.

With the venture capitalists holding 32 per cent of the equity stake, and around 16.65 per cent earmarked for employment stock options, the co-founders and promoters continue to hold the remaining 51 per cent of the paid-up capital, which will get diluted during the second round of funding after market valuation and price fixation with a high premium built into the offer.

During the year under review, MindTree had entered into strategic alliances with as many as six global companies such as Ariba, Autonomy, Vignette, Ubizen, and Gallup to offer net enabled solutions in the areas of e-commerce, ERP wrap around applications, and front office applications.

According to MindTree vice-chairman Subroto Bagchi, as part of its consultancy, the company has been focusing on technology practice for Internet technologies, including voice over IP, network management systems, and wireless.

"As a spin off, the company has been able to set up a technology lab of its kind for knowledge arbitrage that will generate a wealth of market trends, project experience, and industry reports. The vision of MindTree Labs is to have the most informed e-business team on the planet with a reservoir of research and solutions," Bagchi affirmed.

Among its 27 customers in the area of B2B and B2C and technology markets are: Lucent Technologies, Avis, Harvard University, Arista Soft, Amber Networks, Mirapoint, Aventis, Websitepros, Hindustan Lever, Ogilvy, and Fab Mart.


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