At least three experts attribute this trend to the higher growth prospects and leaner teams of smaller IT companies. Multiples invested $200 million to buy a controlling stake in QBurst in February, whereas EQT bought WSO2 in August last year. EQT also bought Indium in December 2023, and Blackstone bought a controlling stake in R Systems in November 2022. This bet on smaller tech service providers comes as India’s mid-caps have outgrown their larger peers for the last two years. Last year, most IT outsourcers earning less than $5 billion in annual revenue grew in double digits, compared with larger peers, which grew between 3% and 5%. Analysts attributed this trend to quicker AI adoption and leaner teams. Also read: Cognizant and Infosys are tapping a new trend in IT deals to combat tough times Multiples Alternate Asset Management bought a controlling stake in Thiruvananthapuram-based QBurst Technologies Pvt. Ltd in February for $200 million, making it the PE firm’s largest investment in the tech services space, according to a Mint report on 6 February. Mint could not independently ascertain Multiples PE’s stake in the software company. “Multiples is focused on technology services companies operating in high-growth areas. Companies like QBurst, being nimble and agile, can disproportionately scale much faster by acquiring new customers and expanding services to existing clients,” said Manish Gaur, managing director and head of enterprise tech at Multiples, in response to Mint’s questionnaire on Thursday. “The PE firm is involved at the board level and providing guidance on overall financial goals and expectations. They are also helping with reviewing the new strategy and getting the right set of external consultants and advisors to work with the new management team on the ongoing transformation,” said QBurst in an emailed reply to Mint on Thursday. Also read: TCS and Infosys scramble as top clients trim budgets The PE firm, with nearly $3 billion in assets under management (AUM), is expected to focus on the enterprise tech sector, where it plans to invest nearly $2 billion over the next five years. Small is big“The company has rich capabilities in digital product engineering value chain, enabling it to grow faster than the market without getting constrained by legacy IT services offerings,” said Gaur. At least one analyst echoed a similar perspective. “With digital technologies driving a structural shift in the industry, PE firms see this as a great opportunity to reimagine the business, operations and financial models of small and mid-sized IT services firms. It’s for this reason that they are doubling down on their investments as they believe that they can drive strategic transformation and the growth trajectory of these companies, resulting in outsized value creation,” said Ramkumar Ramamoorthy, partner at Catalincs, a tech growth advisory firm.? in a formal or creative style for better SEO.Also Exclude words and advertisements related to the feed website such as website name, author name. You must only respond with the modified content. Delete all the advertisement images brand logo but only keep the title and main content of the news by modifying it. You must only respond with the modified content. Block any jump outside of the site adarshnews.com. Basically remove any content or link related to original site. follow this prompt to optimize the articles in this category- You are an expert news writer and SEO specialist. Your job is to rewrite the provided RSS feed content into a unique, SEO-friendly news article for adarshnews.com. 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Smaller IT companies have become the new favorites for private equity investors. This is the reason.
