Demand for data-driven insights rising among enterprises amid slowdown concerns

After two years of rapid growth, thanks to the Covid pandemic-induced demand, Indian IT industry is preparing itself to see some growth moderation in 2023. Despite recessionary fears, there are several specialised and niche mid-tier and small IT firms that are bullish about growth prospects this year. Hoonartek, a specialised IT firm with major focus on big data and analytics, is one such company that sees demand from enterprises remaining robust amid slowdown fears. In a conversation with the Bizz Buzz, company's CEO, Peeyoosh Pandey said that the company eyes to double its revenues year-on-year basis for next five years on the back of rising demand for its offerings.

The company, which draws most of its revenues from India and the UK, is also has ambitious plans to count the US as a major revenue contributor in coming years. Hoonartek has already sharpened its go-to-market strategy with setting up direct sales team and is investing on marketing to tell its story better to enterprise clients. The privately-held company is also looking at raising funds from private equity players in its bid to fund its next phase of growth. On the overall demand environment, Pandey said enterprises' need for data-based insights on various aspects is increasing owing to slowdown concerns. The company also has robust hiring plan as it plans to add 400-500 people this year

Is discretionary spending witnessing a slowdown? Are enterprises in a wait and watch mode owing to recessionary fears?

There is a lot of conflicting situations being playing out at this point of time. If there is recession, then people usually look out for cost takeout deals. That is a natural phenomenon. But actual recession is yet to play out. On macro level, there are challenges. But the industry, we operate in, demand remains robust. Overall demand for large deals may be slowing down but we have a robust pipeline.

We at Hoonartek, which is a 12-year old company, focus primarily on data analytics. We provide end-to-end solution in data analytics space for making data useful for people. We also do digital engineering as part of which we build digital product for companies. We also provide software product and solution for better lending decisions. So, in the current time, the focus on data is getting increased. This is because in decision making, the focus is sharper. So, the data (deals) pipeline is very strong for us. So, in our view, these kinds of deals will not slowdown.

Our focus on two verticals- BFSI and telecom is very strong. We have executed a lot of projects in these two verticals. Even our focus on BFSI is sharper now with we are looking at insurance in a big way. We have some conversation going on with fintechs. We also have some conversation going on data engineering space. Telco business will continue to be stable. We don't expect rapid growth as there are not many telcos in the world. We will try to gain market share and wallet share in the telco space. We will start exploring in healthcare space. Especially, a lot is happening in the US healthcare space. We will work on that space in 2023.

Does Hoonartek provide only software solutions or does it have any product focus?

We have a portfolio of product and solutions. We are looking for certain percentage of revenue coming from products. We have built a number of products over the last 12 years. That is an area we will continue to invest. There are two products which we have inhouse and we will continue to invest certain percentage of our revenue in products. That is the differentiator, we will continue to have.

Which is the most important geography in revenue terms for Hoonartek? Does the US contribute the most?

As far as the US as a geography is concerned, it is a focus area for us but not an important market as yet. Current revenue from the US is very small. Its contribution to revenue stands at less than 10 per cent as of now but in next five years, we aim for drawing around 50 per cent of our revenues from the US. Currently, India and UK contribute the most in terms of revenues.

As far as market environment is concerned, the US seems strong with conversations going on. In the UK, we are in talks for several deals and those are still going on. So, we have not seen weakness in these markets as yet.

Can you elaborate the go-to-market strategy of Hoonartek?

We used to have a go-to-market strategy of partnering with a few players. After I joined, we have set up direct sales team. In India, we have a sales team. In the UK, we have a team now and we are in the process of setting up a team in the US. We are setting up marketing and lead generation teams. We are also process of partnering with a few more players. So, we are expanding our go-to-market strategy so that we are able to tell our story to more number of enterprise clients. The idea is to we will go directly reach out to higher number of enterprise clients and we are building direct pipeline. The go-to-market team currently comprises 10 people. Some are in the process of joining. And the plan for 2023 is to double our revenue year on year for the next five years. The first step is to build up the base. That process has been done in the last eight-nine months. So, the engine is in place and as the engine starts humming, we will go all out. By FY27, we aim to be a $100 million company.

What is the present headcount and what are plans of hiring in 2023? Do you have any supply constraints with regard to engineers specialised in data science field?

Next year, we are looking at hiring 400-500 people. Currently, we are 800 people including contractors. The strategy is to build home grown talent. We look at laterals but we are aware that laterals come at a cost. We are very good at building teams and our training programme is very robust. We take freshers from colleges and there are some colleges, we are building a deep relationship. We may look at investing in a training centre in tier-II or tier-III city. That may come up in next two years.

Do you have plans to go for public listing of the company as you reach certain revenue milestone?

That is the strategic conversation, we are having. We are considering listing at a certain milestone. We have a robust ESOP programme. We may also look at raising capital in six to eight months from private equity funds.

What kind of challenges you may face in coming years amid slowdown fears?

We may face some delay in decision making. If market slows down, leadership hiring may be a challenge. Otherwise, I am very optimistic about growth prospects. We will continue to invest and double-down on our plans.