BPOs eyeing external funding to support expansion
By Lawrence Casiraya
INQUIRER.net
First Posted 16:04:00 08/14/2008
Filed Under: Economy, Business & Finance
MANILA, Philippines -- Outsourcing firms are eyeing equity funding either through venture capital or initial public offering (IPO), according to a recent survey.
The survey, conducted by industry tracker Outsource2Philippines (O2P), drew responses from 81 executives from business process outsourcing or BPO vendors.
More than 60 percent indicated they are actively considering some form of equity funding to support expansion plans, most of them targeting to raise between P100 million and P500 million.
More than 10 companies, meanwhile, are aiming to raise P500 million to nearly a billion pesos in total equity funding. One company indicated it plans to raise no less than P5 billion in equity funding.
"Results suggest that respondents are confident their organizations will continue to grow but that access to equity funding will impact that rate of growth," said Frank Holz, O2P chief executive.
The survey also shows BPO executives are looking at angel investors, venture capital and IPO to provide additional funding.
Most of those seeking outside investors said this will help expand existing facilities or create more sites, particularly in the provinces.
Most of the major BPO firms present in the country, in particular call center operators like PeopleSupport, Teletech and Convergys, are already publicly listed in the US.
Nearly 70 percent of those surveyed consider the US as the best source for equity funding. On the other hand, about 30 percent are optimistic about attracting Philippine-based investors.
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