IT services major Tech Mahindra has decided to continue with its acquisition strategy even as it scouts for companies which will expand its customer reach or help it get expertise in new cutting edge technologies.
Tech Mahindra has been active in the inorganic front through a steady buyout of niche companies which expands its portfolio of offerings. In December, 2015, it bought controlling stake in Pininfarina, an Italian automotive and industrial design firm, through a joint venture with group company – Mahindra & Mahindra.
Talking to FE, Tech Mahindra chief strategy & marketing officer Jagdish Mitra said, “Our acquisition strategy will be a combination where in some places we will look to expand because of customer reach & scale or will do new cutting edge technologies in space like digital or platforms.”
Tech Mahindra has acquired companies which have brought it specialised expertise like Lightbridge Communications, Softgen holdings etc. Mitra said, Tech Mahindra will look at acquiring niche technology companies which might otherwise take longer time to build internally and it will also shorten its time to market.
On the potential size of the acquisition, the chief strategy officer said, “I do not think we are deterred by size, we have to only determine how strategic it will be for us.” Tech Mahindra acquired Satyam Computer in 2009 when the latter was bigger in size. In parallel to the acquisition strategy, Tech Mahindra is also attempting to create an start-up kind of entrepreneurial eco-system within the company while also being engaged with these firms outside.
“We are trying to build an eco-system which will incubate technology platforms within the company with every vertical and competency given the mandate to create start-ups,” Mitra said.
Tech Mahindra is engaged with over 30 technology platforms internally. Besides, it has also set up venture capital fund with a size of $150 million to invest in technology start-ups. According to Mitra, it has already invested in three such start-ups. The key point for Tech Mahindra being that it connects these startups with its customers so that it is beneficial for both sides.