A Transaction Worth the Wait

October 8, 2013
by Thanasis Delistathis

Today one of our portfolio companies reached a pivotal milestone — GlobalLogic, which operates design and engineering centers around the world, agreed to be acquired by Apax Partners. This is a bittersweet moment for me as I have been involved with this company as an investor for 13 years. Yet this is not the end of the road for the company. The acquirers want to support the company in building an even larger business by growing its international technical prowess.

This was one of my first investments ever and it typically doesn’t take this long to exit an investment. Why would a VC stick with entrepreneurs over a 13-year time horizon? Because the reality is that great companies take time to build.

In the year 2000, when GlobalLogic’s founders Rajul Garg, Sanjay Singh, Manoj Agarwala and Tarun Upadhyay walked into our office and made the case for our $1.5MM initial investment, we saw a kernel of an idea. As Internet and mobile adoption took off across the globe and as software grew to affect more aspects of our business and personal lives, we recognized the seemingly unquenchable demand for talent that could build that software. Quality engineers were harder to find and more expensive to hire. The founders thought it was cheaper to build products overseas.

Like many great entrepreneurial endeavors, it didn’t all start out rosy. It took some time to settle on its business model and approach as it operated in one of the most tumultuous economic decades in recent history. But this visionary team of expat entrepreneurs had a global perspective, a flexible mind, and the smart sense to hire a great management team, including Peter Harrison, Shashank Samant and Wayne Grubbs to lead and scale the business to where it is today.

Since those early days, LinkedIn, Google, Medtronic, Avid, Oracle and hundreds of other customers, storied brands and young upstarts, have tapped GlobalLogic as an R&D partner for product design and development. GlobalLogic’s 6,600 employees, spread across India, Ukraine, Argentina and the United States, work alongside customer engineers to build software that powers medical devices, runs publishing platforms and phone systems, processes e-commerce transactions, displays content efficiently or creates extraordinary digital experiences, among other things. These are not back end IT systems. These are the crown jewels of the customers’ product portfolios. The company has grown from it humble beginnings to a multi-hundred million dollar business that has been profitable for the last 10 years.

Over time other great investors like Westbridge, NEA, Sequoia and Goldman Sachs joined us in the company. While GlobalLogic has been profitable for more than a decade, rather than exit, we chose to stay with the company. We could have sold our position in the company years before and still generate a very profitable return for our investors. But to really build a great company, and by extension great value for our shareholders, takes time, and we are glad we waited. Had we had funds with an even longer time horizon we might have waited even more. We are confident that the company has a great future, and we wish the management team and new owners great success.


Originally published at navfund.com.

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