Persistent Systems Secures $18.8 Million in VC Funding Led by Norwest Venture Partners & Gabriel Venture Partners

Persistent Systems, a leading Outsourced Software Product Development company, announced last week that it has closed a round of financing bringing total capital investment to $18.8 million. Persistent’s funding comes from two leading venture capital firms, Norwest Venture Partners (NVP) and Gabriel Venture Partners. NVP invested $13.8 million in this round, and Gabriel Venture Partners invested $5 million. Promod Haque, Managing Partner of NVP, and Navin Chaddha, General Partner of Gabriel Venture Partners, have joined the Persistent board of directors.

The investment comes at a time when Persistent has been on a high expansion trajectory with both indirect and organic growth initiatives. Growing at a 70 % CAGR over the past three years, Persistent has seen robust growth in its stature as a leading Outsourced Software Product Development company with clients ranging from start-up companies to Fortune 500 corporations.

Dr. Anand Deshpande, Chairman & Managing Director of Persistent Systems, said that “Persistent has charted aggressive growth plans in the coming year, and it is desirable that we partner with the leading and most established venture firms that will bring world class business process, offer valuable experience at the board level and provide top class exposure for Persistent in the most developed market-the US. This will elevate Persistent to the next level, and the company will further augment its presence in the US and aggressively look at accelerating its growth. We have been working with Navin for more than a year as a trusted partner and were delighted when he brought Promod to co-lead the investment with him.”

Expressing his views on this investment in Persistent Systems, Promod Haque stated that “Persistent is a profitable company with superior technology, significant customer traction and a highly experienced management team – a combination that is extremely rare to find, and an investment opportunity NVP couldn’t let go. The company has already proven itself in the rapidly growing Outsourced Software Product Development area, and this infusion of capital will further accelerate Persistent’s ability to access this global market opportunity. Several of NVP’s portfolio companies have already been using Persistent Systems’ development services for quite some time and are extremely satisfied with the quality of people and services rendered. One of the critical reasons that NVP agreed to make this investment is based on the premise that several more of NVP’s current and future portfolio companies could partner with Persistent to accelerate their product development schedules and achieve cost effectiveness.”

Outlining Gabriel’s rationale for investment in Persistent Systems, Navin Chaddha explained, “The Indian Offshore Software Product Development space is expected to touch the $8 billion mark by 2008 according to NASSCOM-McKinsey report. To meet the market demands of such scale, a company needs to have a stellar management team, strong employee base with distinct engineering skills, scaleable operations, experience in shipping products and sharp business direction. Persistent shows remarkable promise in all these areas and has a diversified customer base of over 150 customers along with experience in shipping more than 700 product releases and over 2300 employees today (80% with Computer Science degrees). The momentum is with Persistent, and we have come in at the right time.”