Mavcap invests in firm tapping BPO market

MALAYSIA Venture Capital Management (Mavcap) seed division is investing in Sigmax E Services Sdn Bhd, a Multimedia Super Corridor- (MSC) status company, which aims to tap the global multi-billion dollar business process outsourcing (BPO) market.  

Mavcap’s seed division was allowed to invest up to RM500,000 in a start-up, Sigmax-e and Mavcap said in a statement on Tuesday. 

BPO means contracting non-core processes to a specialist partner to improve quality and free up management time for strategic and tactical issues. 

Management consultants McKinsey & Co said the global opportunity for BPO was supposed to hit US$140bil by 2008. 

So far, India has the lion’s share of this market due to its low wage structure and highly trained workforce, which spawned world-renowned companies such as Satyam, Daksh e-Services and Wipro. 

Sigmax-e chief executive officer Srikrishna Vadrevu said: “Kuala Lumpur has a lot more to offer, such as the Chinese language capability, the MSC infrastructure which guarantees uptime of power and telephone lines and a superior risk profile. 

“And although wages here are higher than India, they are about 40% lower than in the US, Britain, Hong Kong and Singapore. And the other advantages even out the score,” he said. 

He noted that although Malaysia had all the requisite information technology (IT) skills and great infrastructure, especially in the MSC, there was no BPO industry. 

He said that while multinational companies such as Standard Chartered Bank, Hong Kong and Shanghai Bank, Dell Computers and Citibank had recognised the opportunity and were setting up global shared service centres here, there was no independent company outsourcing services to other multinationals. 

“Even if we get a small piece of the pie, it will still have a major impact. We believe Malaysia’s share of this market could be at least US$1bil in the short term,” he added. 

Sigmax-e has a four-person management team that includes three Malaysians. 

It is setting up a state-of-the-art 300-people processing facility in the MSC and will offer transaction processing and consulting for other companies to set up their own shared service centres. Within transaction processing, the company will be focusing on areas such as accounts payable, payroll, customer contact services, credit card applications, mortgage servicing and credit underwriting. 

It has two channel partners in the US, two in Canada, one in Britain and one in Singapore. – Bernama