AppLabs lines up $6 million expansion plan

Mulls Rs 165 crore IPO, eyes acquisitions worth Rs 400 crore.

AppLabs, an independent quality management and software testing company, has embarked upon a $6-million (around Rs 25 crore) expansion plan involving setting up of an over 1,000-people testing facility and a training centre in India and a testing facility in the UK.

The expansion plan also involves hiring 800 professionals this year to take its global headcount to 2,500.

The US-based company is also scouting for acquisitions and considering an initial public offer (IPO) or the private equity route to raise about $40 million over a year to partly fund these acquisitions.

Shashi Reddi, founder chairman and chief executive officer, AppLabs, said the firm was looking to acquire companies operating in pharmaceuticals discovery and game testing. The size of the acquisitions would be around $100 million (around Rs 410 crore). Last year, the $70-million company acquired UK-based IS Integration for $37 million.

According to Reddi, a new testing facility with a seating capacity for more than 1,000 employees will be opened in Hyderabad by October. This apart, the company will open its first testing facility in the UK this month.

The 30-seat facility will be the beginning of a series of testing facilities to be opened in the UK and Europe in the next 12 months. The testing facilities were a part of AppLabs global strategy to expand presence in Europe, Reddi said.

He told mediapersons here on Thursday that the company was hiring 100 employees every month and had plans to recruit 800 more during the financial year. Of these, 700 professionals would be placed at its Hyderabad facilities.

Launching the AppLabs new brand logo, Adam Ripley, senior vice-president (marketing), said AppLabs target market would be Forbes 2000 companies.

The software testing market is estimated to be around $13 billion, of which the outsourced part contributes $3 billion with India’s share being about $1 billion.