By: Aman Singla, Akhil Anand Vajjhala, Varshika Prasanna (NYU), Anthony Borgese, Mustafa Bayramli, Shuishan Xiao (UPenn)
Goldman Sachs’ Merchant Banking Division and private equity firm Everstone announced in August their minority stake acquisition in Infostretch, a digital engineering firm. Infostretch focuses on helping its clients accelerate their digital initiatives through proven and intelligent data-driven strategies to modernize their systems. Through this acquisition, Goldman Sachs and Everstone hope to be able to profit off of the 10.4% annual growth in the digital services industry and grow their presence there. On the other side of the deal, Infostretch hopes to take advantage of Goldman and Everstone’s network in healthcare, financial services, and technology to grow their business in these areas.
Incorporated in 2004, Infostretch is headquartered in Santa Clara, California and led by the CEO and Founder Rutesh Shah. The PE-backed company provides professional and digital services, which include strategy for blockchain integration and digital development. Infostretch Corp. has more than $50 million in annual revenue and is a leader in the digital engineering services sector.
On August 18, 2020, an undisclosed amount of development capital was provided to the company by Everstone Capital and Goldman Sachs Merchant Banking Division. The investment will help accelerate the company's business growth and expand its digital engineering service offerings for both enterprise and digital-native companies.
Overview of Everstone
Everstone Capital is an India and Southeast Asia focused investment firm with over $4bn in private equity and real estate funds, as well as business in venture capital and green infrastructure.
The private equity fund at Everstone Capital is worth around $2bn and consists of investments primarily within India and Southeast Asia. They make investments “through control, minority, and platform investing”. Their private equity investment philosophy “emphasises proactive deal sourcing, as well as an active and hands-on operating style to deliver long-term returns”. In 2018, Everstone’s private equity fund underwent a major restructuring, with 14 employees exiting the firm – of which 4 were managing directors and 3 were executive directors. According to a study conducted by Kiddy and Partners, “the company has become top-heavy and there were too few junior people to do the leg work [in terms of analysts and associates]”.
However, according to Sameer Sain, the co-founder and chief executive of Everstone Capital, "We have added excellent people...and grown our team as needed but we felt that it was time to ensure we had the right organizational structure and talent for the future...,".
"Digital will be the core differentiator for businesses of all sizes in almost every segment over the next five to ten years." - Avnish Mehra, Senior Managing Director at Everstone Group, on the investment into Infostretch.
Overview of Goldman
Goldman Sachs Group, Inc. is a global leader in the financial services industry. Headquartered in New York City, the company offers services in investment management, securities, asset management, prime brokerage, and securities underwriting.
The Company includes 4 business units…
1. Investment Banking
Goldman Sachs is one of the leading M&A advisory firms, being at the top in sizes of transactions. In 2015, investment banking accounted for 21% of total company revenue.
2. Global Markets
This segment consists of revenues gained from the bank’s trading activities, both on behalf of its clients and for its own account. Global Markets accounted for 37% of total revenues in 2017.
3. Asset Management
The Asset Management division provides investment advisory and financial planning services and offers investment products to a diverse group of institutions and individuals worldwide. This division generates revenue mainly in the form of spreads, or management and transaction fees. In 2015, revenue generated by the Asset Management division accounted for 18% of total company revenue.
4. Consumer and Wealth Management
This sector includes management and other incentive fees and results from deposit-taking activities related to the firm’s wealth management business
"Infostretch has built an impressive brand and list of loyal clients in healthcare, financial services and high tech. Their global presence and ability to apply the latest capabilities in areas like AI and analytics with best practices in Agile and DevOps set them apart in the digital engineering space." - Harsh Nanda, Managing director in Goldman Sachs’ Merchant Banking Division
Overview of Infostretch
Infostretch is a digital engineering services firm that focuses on advancing digital initiatives of enterprise and digital-native companies. Their customer list includes BMW, Knipper, L'Oreal, Marriott, Roche, Silicon Valley Bank, Starwood, T-Mobile, and Vodafone.