Amid a mad scramble to prepare for work from home (WFH) in the wake of COVID-19 led lockdowns, Everise, a Singapore-based customer experience (CX) company with a global presence, found the transition remarkably easy.
A WFH pioneer
Backed by private equity firm Everstone, Everise was an early adopter of WFH – 12 per cent of its workforce was home-based in January this year, well before the pandemic set in.
However, COVID-19 brought with it a new sense of urgency. Everise founder and CEO Sudhir Agarwal said, “On a visit to New York in March, I saw nothing being done from a COVID point of view. Obviously, being in Singapore, we were a little ahead of the curve, because we saw what was happening across Asia. It was soon announced that two of our biggest centers – the Philippines and Guatemala – were shutting down.”
As many of its more traditional peers floundered, Everise found itself in an advantageous position. The systems to facilitate WFH had already been put in place. Agarwal said, “In a matter of two weeks, we were able to move 95 per cent of our global workforce to WFH.” In markets like the Philippines and Guatemala where WFH was difficult to manage, the company housed its employees in Airbnbs, with cleaners, cooks and other support staff. Not a single client was abandoned through the period, according to Agarwal.
He is candid enough to admit that Everise preparing for WFH had little to do with an impending pandemic. Agarwal said, “The reason I was very interested in WFH, was to increase my talent pool – to bring in demographic sections who unfortunately, cannot come to work in an office.” For instance, housewives with young children. Or a large population who are physically challenged but fully capable of working. Secondly, it made great economic sense. He said, “At the end of the day, WFH is a profitable business.”
Not just another BPO
WFH was just one of the ways Agarwal was trying to build a different CX-led BPO organization. A veteran in the space, Agarwal started at GECIS (which would later become Genpact) in 1999, on advice from a friend and golf companion Pramod Bhasin, giving up on two offers from management consulting companies. In 2005, he moved to Aegis to join the team that increased the firm’s revenue from $75 million to close to $1 billion a decade later.
Convinced by close friends to foray into an entrepreneurial venture, Agarwal started his next company with a clear brief. He said, “There was no point or fun doing the same thing. I wanted to create something unique: a digitally-led customer experience company focused on Japan and Korea since there was no global firm servicing these markets.”
While creating his new firm – initially called Sunrise BPO – Agarwal took a conscious decision to shift from the industry norm of an asset dependent model with large offices and data centers. His technology driven vision found resonance with investors. He met Alok Oberoi, the co-founder of ACPI Investment Managers, who was initially brought in to work on a term sheet. After a long meeting with Agarwal, Oberoi invested in the fledgling firm in both a personal and professional capacity.
Oberoi introduced Agarwal to a former colleague from Goldman Sachs – Everstone co-founder and chief investment officer Atul Kapur. Agarwal said, “I had a coffee with Atul in London and after half an hour, he said, ‘I am in’. I told him ‘But I don’t have any deals.’ He said, ‘No problem – we will build this together.’ It was very unlike the usual PE approach.” All of 2016 was spent looking for deals and pursuing an aggressive acquisition strategy.
‘M&A is really what I am about’
Ever since, the company has acquired US-based CRM specialist C3 and Trusource Labs which helped it foray into the technology and product experience space; the Malaysia-headquartered Globee, a joint venture with a Korean customer management company Ubase, and most recently Malaysia-based AI firm Hyperlab. Agarwal said, “These are the milestones in becoming an end-to-end omni channel customer experience platform.”
Speaking about his acquisition playbook, Agarwal has a few rules of thumb – buying only for capability or geo presence and not for revenue. He focuses on industries with long sticky contracts and prominent clients in healthcare or tech which currently account for 90 per cent of Everise’s revenue.
Also, no deals from India. Agarwal said, “I have nothing against India, but I’ve already done a lot there. I don’t want to get into a country where there could be any geopolitical risk. And secondly, which brings my revenue per person down, because I’m in the business of increasing my revenue and EBITDA per person.” Also, no companies that are too large and likely to pose integration problems. If there are any red flags, he prefers to walk away and focus on the next deal.
And finally, only founder-to-founder deals, in which the core management teams stay on as part of the leadership at Everise – C3 which was making losses and saw a management change post acquisition, being a notable exception. In other cases, founders become part of the broader leadership team. For instance, Everise CMO Chris Greenough who was part of the founding team at Hyperlab, now Everise DX. Among other things, this helps resolve the invariably prickly issue of integration.
Everise has a team dedicated to integration, working to a 100-day plan. Every single migration happens within that time frame. Agarwal said, “The company leadership knows who they will report to even before the deal is closed. There are a few roles we might make redundant, which we are very clear about during the acquisition. Integration is the number one reason why we have been successful in acquisitions.”
He cites the growth of these companies immediately after being absorbed into Everise as a proof point. Trusource Labs, now Everise PX, has upped its topline almost 100 per cent. C3, now Everise CX, which lost $10 million the year it was acquired has grown by 20% in the past year and is now extremely profitable.
The acquisitions have also left the firm with a strong management team. Pointing to handpicked leaders for every function, Agarwal said, “We just finished our latest net promoter score survey and came up at 62 per cent which is two times above the industry average, according to Bain and Company. This team can actually handle revenues of $1 billion.”
Transforming CX with AI
The focus on technology has paid off in other areas too. While 95 per cent of Everise’s business used to be voice-driven, it is down to 75 per cent, with the rest accounted for by other formats including chat bots. Agarwal’s thesis is that people want a solution to their problem, and not necessarily to speak to another human being. Only issues that cannot be resolved by bots are elevated to a human operator. Agarwal said, “Over the last two years, most of our clients have adopted some form of AI or digital omni-channel in the way they service their customers.”
US-based companies contribute to 95 per cent of Everise’s business, with 65 per cent accounted for by healthcare. While reluctant to cite names in the tech space, Agarwal says that it works with at least six of the top 10 unicorns. It has been part of designing the customer experience for a smart home security service which got acquired by Amazon.
AI is also being deployed to collate data. As Agarwal puts it, “We have so much data on our customer’s customer, it’s unbelievable. But if you have one thing sitting on a CRM, another piece on the cloud and a third on voice, by the time you integrate the whole thing, you have lost the customer. Our bots give real time feedback to our customers on what their customers are actually having problems with. Resolution time becomes very effective.”
And yet, he views technology as merely an enabler – the real differentiator, he believes, is the people. He says, “We have the highest Glassdoor rating in the industry at 4.5. If you don’t have the people, all the technology in the world doesn’t help.
Even as Agarwal considers COVID-19 a “pathbreaking” event that has separated “the leaders from the laggards in every single industry”, it has not been uniformly a blessing for Everise.
While it is business as usual for the firm’s employees and clients due to its strong WFH practice, COVID-19 has put a damper on some of its acquisition plans. There around 20 deals in its M&A pipeline, at least one of which is likely to close this year. But Agarwal is clear that he will probably not look for an acquisition in countries where Everise is yet to establish itself. He said, “There are deals happening virtually right now and that’s not an issue. But I probably will not get out of that comfort zone, till our teams can travel to do due diligence. If I want to buy something in the US or Japan, I will because I am already there.”
However, the firm has been expanding organically. Agarwal expects to close this year at 24 per cent growth over the last. A few years ago, Everise had set itself a target of becoming a half billion-dollar firm by 2022. Asked how close he is to realizing that goal, Agarwal said, “I don’t really care about revenue. From a value point of view for my shareholders, it will be a half a billion-dollar company – I think we are probably on track and will hit that number by 2021. Really, my aim now is how can we become a billion-dollar value company by 2025.”
This content was created in partnership with Everise. Please remember to register for our next webinar – ‘Strategies to Thrive Through a Crisis’ which will feature Everise’s founder Sudhir Agarwal and Everstone co-founder and CIO Atul Kapur in conversation with DealStreetAsia’s editor-in-chief Joji Philip