How LatentView drives transformation
Worldwide IT spending is projected to reach $4.6 trillion in 2023, reflecting a growth of 5.5 per cent compared to 2022, as predicted by Gartner in an April 2023 release. “Growth will be driven by the software segment as CIOs prioritise spending to capture competitive advantages through increased productivity, automation and other software-led transformation initiatives. Despite continual global economic turbulence along with high inflation, countries across the globe are expected to witness positive IT spending growth in 2023. The IT services segment will continue its growth trajectory through 2024, largely as an infrastructure-as-a-Service (IaaS) market, which is projected to achieve over 30 per cent growth this year,” adds the release.
Organisations are increasingly leaning on technology for scaling automation while humanising UX, streamlining the supply chain, enhancing cyber resilience, and delivering their sustainability goals towards becoming purpose-driven businesses. “Overall, the IT industry has not just weathered the pandemic-driven disruptions of the past few years, but it has flourished. In today’s digital era, data has become one of the most valuable assets for organisations. The Data & Analytics (D&A) industry is growing rapidly as more organisations adopt data-driven models to streamline their business processes. Organisations are increasingly turning to data analytics to enhance fact-based decision-making, implement data-driven models, and expand data-focused product offerings,” explains Venkat Viswanathan, founder, and chairman of LatentView Analytics Ltd, which has just crossed the Rs500 crore mark.
Providing a 360-degree view
LatentView Analytics provides a 360-degree view of the digital consumer, enabling companies to predict new revenue streams, anticipate product trends and popularity, improve customer retention rates, and optimise investment decisions. Viswanathan is a first-generation entrepreneur who has helped several Fortune 500 companies leverage an India-based offshore service delivery model in the financial services and telecom sectors for over a decade. He has more than 18 years of experience in management consulting, technology, and global IT services management.
Before founding LatentView, Viswanathan was part of the global leadership team for Cognizant’s Communications practice, where he was in charge of strategy and business development and worked closely with field sales teams in winning key global service provider clients and growing the business to the $20 million milestone.
He travelled the world, expanding his network and meeting industry professionals and potential clients across the US and the UK before becoming an entrepreneur. In 2006, he started LatentView with a focus on providing business analytics solutions to global clients. The company targeted business customers, marketing heads, risk management heads, and CEOs. It secured its first international client in 2008. By dedicating more time in the US and reconnecting with friends from his academic life, he was able to expand the business overseas.
He was joined by his wife, Pramad Jandhyala, who played a pivotal role as the co-founder. She anchored key roles in strategy and execution, guiding LatentView's rapid growth and earning recognitions such as the Deloitte Fast 50 award (for 7 consecutive years) and the Frost & Sullivan Analytics Company of the Year award. With a decade-long background in financial services (and analytics), she co-founded LatentView after accumulating over 17 years of experience in securities markets, credit ratings, financial services, all centred around data and analytics. She also concentrated on the people aspect, delving into what motivates individuals to work and related dynamics.
It was the marriage of her work experience and interest in people laid the foundation for LatentView, where she serves as the Director of Finance and Human Capital. In November 2021, she led LatentView Analytics to the public with an IPO that raised Rs600 crore, garnering a record level of subscription at 338 times. Bids worth Rs1,13,000 crore were received, marking the highest ever demand in the history of the Indian primary market.
This demand exceeded fivefold the demand seen for India's largest-ever IPO from Paytm. The data & analytics company was listed at Rs197 (current market price at Rs350), valuing the company at Rs12,300 crore. The founder-chairman, Viswanathan, holds nearly 60 per cent stake in the company, which translates to an estimated net worth of around Rs7,300 crore (almost $1 billion).
LatentView's revenue stagnated from FY19 to FY21. This was due to two primary reasons: the shift from staff augmentation work and clients’ decisions to insource work. Also, the pandemic impacted travel, and a significant US retail account declared bankruptcy in 2019. During this time, Rajan Sethuraman took over as the CEO and realigned the company by verticals. This strategic move enhanced the company’s value proposition and built domain expertise.
“We also ramped up our sales teams, adding account managers and penetrating newer groups within our larger tech accounts,” explains Sethuraman, who has a long history of working with people to drive organisational success, both internally as LatentView’s former Chief People Officer and in his previous roles in the consulting business with Accenture and KPMG.
Throughout his consulting career, he gained deep knowledge in sectors including oil & gas, metals, forestry, and chemicals. His vision for the company is to maximise the value of AI and success for clients with a human understanding of their business needs, guided by expertise in CPG, financial services, technology, healthcare, retail, and other core sectors.
Inspiring clients
“Our top priority is growth, even if it leads to slight margin deterioration,” adds Sethuraman, whose clients span across sectors and locations. “Our expertise includes digital solution accelerators, big data capabilities, social media predictive analytics, and analytics tools. They help and inspire clients to transform their businesses and excel in the digital world by harnessing the power of data and analytics,” points out Sethuraman.
For the fiscal year ended in FY23, LatentView notched up a revenue of Rs538 crore, marking a 32 per cent increase, with a profit after tax of Rs155 crore, reflecting a growth of 26.1 per cent. The net cash flow from operations stands at Rs97.4 crore, and the net worth is Rs118.7 crore. In July 2023, the company released its Q1FY24 report, showcasing a 23 per cent growth in revenue and a 19 per cent growth in EBITDA. “We have another quarter of consistent growth fuelled by our unwavering focus on customer service excellence, execution, and investments in building capabilities.
This growth was broad-based, led by technology, financial services, and CPG. In the current uncertain macroeconomic environment, the need for data-driven decision-making has become even more crucial. Enterprises are grappling with challenges ranging from disruptive technologies to changing consumer behaviour. This is where we play a pivotal role. We continue to experience strong demand for our services across consulting and data engineering. Moving forward, our commitment remains in delivering profitable growth to maximise value for our shareholders,” says Sethuraman.
“Despite macroeconomic volatility, we managed to maintain our growth momentum and report revenue growth. The EBITDA margin was at 19 per cent, a decline of 235 bps Q-o-Q primarily due to seasonally higher visa costs, wage hikes, and increased GTM spends in line with our commitment to building a growth engine for the future. We will maintain our focus on strong execution and remain prudent in capital allocation. Our Cash and Investments (excluding proceeds from the IPO) as of 30 June, 2023, amounted to Rs853.1 crore,” says Rajan Venkatesan, CFO, who has experience in the BFSI and consulting verticals. He oversees M&A, investor relations, treasury, financial reporting, and taxation for LatentView Analytics. Before joining the company, he worked at Deloitte, FSS, and Ashok Leyland.
Says Benjamin Tienor, Director, Brand & Customer Insights, 7-Eleven: “Latent View Analytics is a great partner, adding timely, insightful and actionable analytics to our key business decisions. They have excelled at reporting, visualisation, Al/ML and advanced analytics that have uncovered causes not clear from the top line views. They have proven adept with a variety of data sources (transactions, surveys, external datasets and unstructured data).”
Michael Zeiger, Director, Data Science - Analytics, eBay adds: “I have been working on a daily basis with LatentView Analytics for the past 18 months, supporting all the analytics requirement for the 30-people strong eBay global Strategy group. The analytics input from Latent View is a regular part of our C-level presentations, and drives many of our critical business decisions. Through our long-term relationship, the Latent View Analytics team has built critical domain knowledge that empowers them to work independently and directly with business stakeholders, with little guidance from eBay. The team possesses the right mix of analytics and technical skills, a business mindset, and communication skills. We planned to expand it in 2023.”
Besides these, there is a well-known American multinational fast-food chain that has partnered with LatentView to deliver insights that drive pricing decisions and personalised promotions for the client’s customers across 100-plus regions. Then there is a professional football league partnered with LatentView to lead their data transformation vision.
LatentView created a centralized data repository, migrated their data, and optimized business intelligence and reporting with power platform and augmented BI. “A leading automotive manufacturer partnered with us to automate and optimise finite production scheduling by considering real-time constraints (human, machine, and material) and aligning production with market priority and material availability. And a tyre and mobility company to develop an enterprise model monitoring system, covering all business units and model families. This system will help the client monitor the health of the machine learning models and take timely remedial action on the alerts and recommendations generated, thereby improving their business KPIs,” says Jandhyala.
Looking ahead, Anand Rathi has done some research on the company which highlights that Europe's contribution to LatentView Analytics’ revenue currently stands at only 3.5 per cent. “It has hired a business head for Europe. Within Europe, it is focused on the UK, Germany and the Netherlands. Home to 70 Fortune 500 companies. Moreover, the company is also evaluating M&A in the region. Over the next 3-4 years, LatentView aims to increase the revenue share from this region to a range of 15-20 per cent." Anand Rathi's research report recommends a ‘buy’ rating for the company’s stock, with a target price of Rs455.
Meanwhile, according to MarketWatch Research the global Data & Analytics (D&A) market is poised to experience a notable compounded annual growth rate (CAGR) of 30.4 per cent from 2022 to 2030. The key trends that will drive growth include the integration of Artificial Intelligence (AI) and Machine Learning (ML); amplified utilisation of big data, cloud computing, the Internet of Things (IoT), and edge computing; the ability to analyse data in real-time, coupled with the adoption of automation and self-service analytics.
All this will further fuel market expansion. These trends are set to assist organisations to capture insights from huge, complex and unstructured datasets, make more informed business decisions, predict business outcomes, increase operational effectiveness and improve customer engagement.
Transformative technology
The adoption of Generative AI (GAI) is anticipated to revolutionise business operations by automating diverse functions. This transformative technology is expected to expedite the utilisation of large amounts of data within defined timelines, increasing overall effectiveness and efficiency.
Financial Services, Healthcare, Consumer Packaged Goods (CPG) and Retail, and Technology are key verticals where Data & Analytics has emerged as a vital tool for driving innovation, efficacy and growth. D&A applications encompass two primary categories: diagnostic/descriptive and prescriptive/predictive analytics. The predictive analytics segment is expected to grow at a higher rate primarily due to increasing demand for predictive analytic solutions, across domains such as customer behaviour and future trends in Financial Services, Healthcare, CPG, Retail and Technology.
As businesses continue to harness the potential of Data & Analytics, they can anticipate tangible benefits in terms of strategic decision-making, operational optimisation, and enhanced competitiveness in a landscape increasingly shaped by data-driven insights.
Well-informed, decision-making D&A provides insightful, data-driven information that helps organisations to understand their markets, operations and customers. With the help of D&A they can identify patterns, trends and correlations. Furthermore, they make well-informed decisions supported by data and metrics, rather than mere guesswork. Businesses can enhance productivity, reduce costs, uncover new opportunities and reduce risks by optimising their strategies and making more informed decisions.
Enhanced efficiency and productivity D&A enables organisations to find areas where productivity may be improved, such as waste reduction, better inventory control, and supply chain optimisation. D&A improves customer experience by enabling businesses to pinpoint areas where they may improve the same, such as reducing waiting times, boosting customer service or optimising user interfaces, by providing them with relevant insights on the business.
Therefore, Data & Analytics empowers companies to tailor their offerings to align with the unique needs of each customer, thereby fostering stronger relationships and bolstering customer loyalty. Additionally, D&A facilitates improve risk management as organisations can analyse data in real-time, enabling proactive measures to mitigate potential risks. The persistent demand for D&A remains robust across established markets such as North America and EMEA (Europe, Middle East, and Africa), as well as emerging markets like APAC (Asia-Pacific).