99x secures $20 m investment from Scandinavian investor

Sri Lankan IT firm, 99x has received an investment of US$20 million towards its next phase of planned growth investment, as part of its capital restructuring programme.

The funds were through an investment from Herkules Deal-by-Deal, a Scandinavian private equity company. The investment entails setting up a holding company in Europe, funds for future acquisitions, and cash remuneration for part of the shares held by the current shareholders, the local company said in a media release.

Over a period of 15 years, 99x has expanded through organic growth without a direct presence in Europe, building over 150 digital products for a global clientele. “The new investment paves the way for the company to establish a direct presence in Europe and an acquisition-based growth trajectory, enabling the company to broaden its digital service offerings. This will also enable 99x to attract larger European customers who would expect a strong local presence in the EU. This plan is forecasted to result in doubling revenue and an increase in employment beyond 500 people in Sri Lanka over the next few years,” it said.

Last year, the company engaged the services of Capital Alliance (CAL) in Sri Lanka to prepare the necessary collateral to reach out to potential investors. 99x then secured an investment from Herkules Deal-by-Deal, a reputed private equity firm in Scandinavia. Herkules secured financing from 22 high net-worth individuals in a short period of time. These individuals are influential CEOs and tech entrepreneurs, who would add value towards 99x’s business expansion goals, the company said.

Following the new investment, Mano Sekaram, Founder and CEO, 99x said: “We began this journey to seek investments to establish a direct presence in the Scandinavian region and position ourselves for an acquisition-led growth strategy. This is a significant milestone for our employees and for the Sri Lankan IT industry. We can take pride in a Sri Lankan company being able to win the confidence and trust of such investors and bring foreign investment into the country.”

Fredrik Bysveen, Partner at Herkules, said: “99x’s high customer satisfaction, strong financial performance and the competence of its people was a key attraction for us to invest in 99x’s next phase of growth. We were impressed by the competency of the 99x management team and what they have been able to achieve. We believe the tech investors we have brought together accurately reflect the high quality and substantial growth potential of 99x”. He added that they were happy that founder Mano Sekaram will continue as the CEO and will be “one of our main individual shareholders”.