In January 2021, Unilog entered a management-led buyout agreement with Investcorp, a global investment management firm that focuses on supporting the growth and expansion of lower midmarket technology companies. Investcorp’s majority stake and capital investment will allow Suchit Bachalli, CEO of Unilog, and his senior leadership team to grow their digital technology solutions company and achieve their goals. Bachalli shares how this unexpected partnership happened and how it will open the doors to new and exciting opportunities – both for Unilog and their customers.
How did this partnership come about?
Investcorp reached out to one of our board members, who then connected them with us. We did not have an investment banker, we were not looking for money, and we were not trying to raise capital; it just happened that they liked what we were doing. Investcorp really believed in the strategy and vision we had set for the company, and they believed in our senior executive team. They said we had built a great company and would be good stewards of capital to take their investment and grow the business, so they asked to be a part of our journey.
What was it about Investcorp that really impressed you to partner with them?
I knew they had the global heft to get this transaction done. They have teams in India and the U.S. – much like Unilog. If you think about it, if you were only a U.S. investor, it would be hard for you to buy a company like ours that had so many employees in India where you couldn’t really trust their diligence and see for yourself how they run. Even for a sophisticated investor in the U.S., India is a country that is several thousand miles away and so many don’t know the rules and regulations, tax regimen, government laws, etc. But Investcorp has Indian, American, Chinese, and European companies in their portfolio so these were not issues for them. Knowing they could put together a deal that would help us navigate through this cross-border transaction was really attractive to me.
The deal happened in a pretty unorthodox manner, didn’t it?
Yes. In fact, I never met any of the Investcorp members in person. Because of COVID-19, there were no opportunities to fly out and meet with these investors, so we did all negotiations via Zoom meetings. During one of those meetings, I even gave them the grand tour of our offices. I told Investcorp, if they’re going to be buying this company, they might as well see our workplace. So, I walked around with my computer and gave them a virtual tour – albeit, without our employees since they were all working from home.
With this new capital investment, what do you plan to focus on first?
Front and center, our principal goal is to deploy capital to further our product development. We also want to develop our platform, and that doesn’t mean just adding more feature functionality. We’re looking to build a larger, strategic vision for our platform to determine what role we’re going to serve three, four, or five years from now. The second priority is customer support. We need to move more customer support and development resources to the U.S. so that they can more effectively triage and work the platform to make changes and build upon it. Third, we want to look at opportunistic acquisitions we can make that are adjacent to us in terms of technology and the markets they serve. So, product expansion, customer support, and acquisitions are our three primary growth areas.
What are your thoughts on the increased eCommerce adoption trends triggered by COVID-19?
The pandemic has really compressed the timeline for eCommerce adoption. If you think about buyers who were still using phone, fax, and e-mail to transact with their trading partners, COVID-19 forced them to transact digitally as non-essential businesses were forced to shut down for weeks and most employees had to work from home. So, essentially, this diverse base of buyers had to adopt technology. Now it’s one thing to say this happened because of the pandemic, but the thing about technology and adoption is that it’s “sticky.” Once traditional buyers made the transition to eCommerce, they realized how convenient it is, so they’re not likely to go back to the way they used to do business.
Convenience is addictive. That’s why I think we are entering the golden age of eCommerce, so what we see happening with eCommerce is only going to get bigger and better.
How is this trend going to affect companies that do not have a digital branch?
They won’t stay relevant if they don’t have a strong, digital offering. I think eCommerce is going to become fairly standardized and commoditized soon, and as long as I’m leading that charge, I’m happy to be in that position. In fact, we plan to take what we did for midmarket businesses and apply that to even smaller companies to help them make the digital leap. I think small business in America is facing an existential threat right now. They have to make the investment in digital, but they don’t have the financial, digital, or talent capital to make the transition. So, some of the new products and services we want to offer will essentially address these issues. Right now, we can give them an eCommerce platform at a very affordable price, but we also want to provide digital talent through a subscription model. This model will give small businesses access to eCommerce analysts, SEO experts, content experts – people who can actually run and manage their storefront for them.
Any final thoughts you want to share about Investcorp’s majority-stake acquisition?
Just that I’m excited about our new partnership. It’s going to help fuel our product innovation, make us more responsive to customer needs, and give small to midmarket companies the ability to grow their business with the help of our eCommerce products and services.