B2B IT outsourcing services platform. Main clients - IT consultants (reselling) and direct clients (SMEs).
a) We have a working version of the search platform (MVP);
b) ~20% av. monthly growth. By 2015 May we have reached over 4000 developers within Network companies, screened over 4000 CEE IT service companies, found over 400 to pass entry benchmark, signed user contracts with almost 100 (currently signing with companies of max 500 developers).
c) We have recently started inbound and outbound marketing activities to attract service buyers. Have produced >200 prospects, >30 leads, 3 paying clients at the moment (and 8 leads in conversion cycle at the moment).
Global IT outsourcing market size is 200+ billion EUR (expected 5.4% yearly growth till 2017). Market is highly scattered with thousands of companies offering both volume and niche services. According to over 3000 European executives’ survey in 2013 by Ernst&Young, 6% choose to insource and only 45% wish to remain with their current providers once contracts end. As the statistics are similar across surveyed countries, we could assume roughly similar situation globally. Thus, as 49% are looking for alternatives (that service can provide), global addressable market should be around 100 billion EUR / year.
Problem lub możliwość
There are two main groups of users:
1) Clients (primarily funded start-ups and SMEs):
a. Reliability, delivery guarantees: clients, who work in high-growth/big companies, commonly have tough deadlines and associated high levels of risk aversion. Thus, precise, informed matches and less trial and error in selection process is of utmost importance.
b. Value for money: once reliability is certain, the second most important measure is pricing as compared to competition. Thus, transparency & aggregation of market information rather than relying on a few consultants/agents is favourable.
2) Service providers (IT companies, capable to work on scalable/high scale projects):
a. Long-term, high-income sales channels: many of specialized companies and those with (mostly) below 50 specialists, have little to no sales personnel and rely primarily on sales through recommendations and agents. Additional, more optimal channels are of great need for them to work on highest potential projects for the skills and knowledge that they have.
b. Transparent reputation creation: although quite some providers create steady reputation for their client circle and agents, it is hard to export this reputation elsewhere, making it hard to attract new clients outside their close-ties. This creates market failures, which could be avoided through platform approach.
Rozwiązanie (Produkt lub Usługa)
The service is a marketplace of professional IT companies and their developers, helping clients to find the best long-term outsourcing partner match. We achieve the result in two major steps:
1) We pre-screen suppliers to admit only those that are capable of delivering quality results, so that clients wouldn’t have to do research on their own.
2) We use a matchmaking engine which gives a few but highly matching results, rather than asking clients to post projects and wait for dozens of (largely unrelated) bids from countless providers.
Market is highly segmented and there are no participants with 1+% market share. Both business model and product could eventually be replicated, but we have a first-comers benefit and as a content platform contain increasing amounts of providers' information (as well as knowledge in context) which would be hard to accrue in short periods of time to newly appearing competitors.
Zalety i wyróżniki
1) The service benefits vs. market substitutes - agents (i.e. Ciklum) and outsourcing consultants (i.e. Accenture):
a. For client:
i. Similar value, but lower price: a) service offers pre-screened providers, most of which do trials and/or pilot projects further reducing risks; and b) process does not involve agent/consulting overheads and as pricing is transparent, there are no price arbitrages;
ii. Time savings: a) service search allows to see who can do the job straight, without the need for manual research every time the need occurs; b) client can go in straight communication with the providing company, avoiding middleman (as usual in sub-contracting);
b. For provider:
i. More profitable: 15-35% commission to agent vs. 5% to service;
ii. Brand/reputation creation: provider usually cannot show his track-record to external clients due to strict NDA agreements with agents. The service on the other hand takes into account all provider’s projects and weights his performance accordingly, reducing market failures.
2) The service benefits vs. indirect competition (freelance marketplaces, i.e. oDesk, Elance): service is also an IT outsourcing marketplace, but it addresses different segment of big projects opposite to existing (freelance) marketplaces, which are economically not viable for our target segments.
1) Funds would be use for marketing campaigns (~30%) and to expand the team by new employees in next 6-12 months: 2.5 people for development team - (our current CTO to join us in full time capacity, one Front-End programmer, one Back-End programmer); 2 people for marketing (designer, one content manager); 3-5 sales people (Silicon Valley, New York, UK, Germany, Israel representatives).
2) Turnover and market share:
a. Central Eastern Europe countries employ 700 thousand engineers, our target group is estimated 150 thousand qualifying engineers with a total capacity of around 8 billion EUR a year;
b. Addressable market is ~100 billion EUR, but we will have to research it further to find out precisely how much of the market service marketplace could address;
c. The service uses 5% sales commission, so we could reach 0.4+ billion EUR commission a year once service will expand beyond targeted Central Eastern European suppliers.
Zainwestowano w poprzednich rundach, $
Oferta dla inwestora
Zespół lub Zarząd
Mentorzy i doradcy
Uczestnictwo w inkubacyjnych / akceleracyjnych programach
Zwycięstwa w konkursach lub inne nagrody
Adres strony internetowej
Min inwestycja $ 150.000
Co się dzieje po kliknięciu?
Inwestorzy nie płacą żadnej prowizji.
Po kliknięciu zostaną wyświetlone kontakty autora lub menedżera Startup.Network