Kyiv Outsourcing Forum 2018

1. ITO company and investor
WIN-WIN Approach
Vitaly Gorovoy (1ns0ft), KiOF
April 2018

2. Contacts Speaker
Vitaly Gorovoy
Managing Partner at 1ns0ft
E-MAIL vg@insoftcap.com
FB https://www.facebook.com/vitgorovoy
PHONE +38 063 440 40 40
|1ns0ft 2
a Niche Management Investment Company
in IT-Outsourcing Field
▪ Investing in IT-Outsourcing companies for
theirs further growth and development
▪ M&A Advisory for our partners (strategic
investors or international investment funds)
▪ Scaling and improvement of ITO ecosystem
via lead generation, M&A deals and active
participation in business processes of ITO
companies
▪ Business and IT education;
▪ 8 years of professional
experience in investment
banking;
▪ 6 years in running IT-projects in
different holding structures.
▪ Structuring and selling of the
ITO and IT product businesses;
▪ Experience in operating
management of the companies

3. local international private institutional
active passiveniche all-in-one
financial strategist
Pre-seed
Seed
Round A, …
…
IPOby stage
Types of investors
1ns0ft 3|

4. 1ns0ft 4|
Investments: pros and cons
Pros are… Cons are…
New level
▪ Money
▪ Experience
▪ New level of network
▪ Additional drive and
knowledge
▪ Necessity of additional
control
Control

5. Investor: Niche All-in-one
experience deep in the field general in investments
money,
expertise,
consulting
money
network special (ITO
companies,
social brokers,
leads, sales)
general for all businessesflexible (according to
the specifics of the
ITO business)
general (companies from
different industries)
requirements
result
resources
lots of added value mostly cash
1ns0ft 5|

6. Target criteria for investors
Clients
geography
diversification
features of Sales process
Employees
quantity and quality
freelance/full-time
outstaffing/outsourcing/
solutions
Financials
annual revenue
EBITDA margin
growth rate
average rate
bad debts
account receivables
Technologies
niche/generalist
stack
Management
business processes
experience of the TOP-team
1ns0ft 6|

7. How to be attractive: tips
Clear strategy
Find a niche
Diversify clients’ portfolio
Change business processes
according to the company’s size
TO DO NOT TO DO
Ignore financial statements
Be afraid of partnership
Economize on sales and
marketing
Be afraid of asking for an advice
or help
1ns0ft 7|

8. Real realm of investors’ interest - Exit
1ns0ft 8|
Сapitalization
process
M&A
Cash Cow
model
InvestorM&A adviser
IPO (ICO)
Business partner
WAYS HOW
financial
strategic
full
partial

9. Legal features of investments
1ns0ft 9|
White jurisdiction
Clear ownershipContracts IP
Local developers
(assets, contracts, agreements)

10. 1ns0ft 10|
Investment case
Annual revenue
EBITDA margin
Staff 300 people
Value
Annual revenue
EBITDA margin
Staff 350 people
Value
*at the end of 2017
1,5 year progress
successfully improved the
following business
processes:
▪ Finance & Accounting
▪ HR & Recruiting
▪ Delivery
▪ Account management &
Sales
BEFORE AFTER
X
Y
Z
2,2X
3,5Y
3Z

11. Perspective view
▪ Ukrainian ITO market is not
structured enough
(plenty of Small companies, a few
Big&Middle companies)
▪ Middle+ companies mainly have
structured lead generation processes,
recruitment does not help any more
▪ Small companies mainly have free
resources, but need clients
1ns0ft 11|
Time to move to a next level
It is not easy to
become Middle+ for
Small companies
Clear tendency of
market consolidation

12. 1ns0ft 12|
Any questions?