Financial Times

Virtusa raises $20m additional capital
By Akhry Ameer
Virtusa Corporation recently announced a US$20 million increase in its capital base. This is the fourth round of funding by the global software development and related IT services provider since its inception .

The new round of funding was led by US venture capital (VC) company Focus Ventures with the participation of existing VC's Sigma Partners, Charles River Ventures and Globespan Capital Partners reportedly investing more than their pro-rata rights allocations. The funding had also been highlighted as one of the top 10 investments in New England, USA in recent times.

"The funds raised will strengthen our balance sheet. It is not particularly targeted at one or more specific areas," said Kris Canekeratne, Chairman and Chief Executive Officer of Virtusa. He added that the company didn't really need the capital but it was a good time to raise capital owing to the company's performance. The additional funds would be used for general corporate purposes, global expansion, and sales and marketing. The software developer also completed a full year with operation profits which grew its revenue by 74% for the 2004 fiscal year.

Earlier during the year Virtusa opened its second Advanced Technology Centre (ATC) at the World Trade Centre in Colombo announcing a US$8 million expansion and a plan to increase its staff cadre to 600. Similarly the company is in the process of doubling its capacity in India with a second ATC in Chennai.

Asked for the company's worth Canekeratne refused to comment on account of privacy, but added that the company was capable of running a full year without any projects while continuing to pay salaries to its 1900 staff globally.

The company's net worth was said to be over US$100 million when it announced its second round of funding, where the total VC based investment stood at US$35.5 million.

Virtusa, founded in 1996, provides outsourced software engineering services to retail/financial and telecommunication sectors, and independent software vendors. Headquartered in Boston, Massachusetts, the company maintains five other offices in the USA together with large development labs situated in Colombo, Chennai and Hyderabad in India. Virtusa hopes to have total staff strength close to 3000 by 2005 in its global operations.

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