Tweaked model. Catalincs Partners’ ‘Grow first, pay later’ model to propel tech companies’ growth

Five former senior Cognizant employees, including Ramkumar Ramamoorthy (ex CMD, Cognizant India), have joined hands to launch a new consulting model — Grow first, pay later — where clients don't pay for the first three years or pay a small retainer fee with upside linked to growth in company valuation or P&L.

The Chennai and US-based Indium Software is the first client for the recently launched consulting firm Catalincs Partners.

The ‘Grow first, pay later’ model may sound like ‘Buy Now, Pay Later’ in the consumer goods and more recently in the automobile segment, however it is very different. Here, the commercials are linked to client success in terms of revenue, margins and market capitalisation, Ramamoorthy, Partner, Catalincs, told BusinessLine . He founded Catalincs along with Rajesh Balaji Ramachandran, former SVP and Global Delivery Head for Enterprise Application Services, Cognizant, who was with the IT company for 23 years.

“It is a high-risk reward model. We don’t get a penny if the client company does not achieve the milestone and may have to look at another client. But, if we succeed, we take a sizeable share in the company based on the milestones,” said Ramamoorthy, who was with Cognizant for 22 years.

Partnering CXOs

“We founded Catalincs with the goal of coaching and partnering with CXOs of exciting and promising technology companies, enabling them to catalyse the value they provide to clients and accelerate growth through next-gen business, operating and technology models. Catalincs has brought together a team of successful business and technology leaders with a cumulative experience of over 120 years in building some of the largest technology companies in the world,” said Ramamoorthy.

Catalincs’ focus will be on new-age companies that embrace digital technologies to reimagine their business and operating models to drive superior business value to their clients. The current prospects include companies in IT services, SaaS, Engineering Services, Platform and BPM space, he said.

‘Sweet spot’

“Our sweet spot is companies looking to transition from the inception stage to high-growth stage. The capabilities needed to make this jump or transition from one stage to another are very different. That’s why we see many companies stagnate or languish once they hit a certain threshold. Today, there exists a lot of white space between VC-funded companies and PE-backed companies in terms of size, capability. That’s an area we want to fill using our deep experience,” he said.

Importantly, the management team should be very entrepreneurial and ambitious; be open to change, and should have managed the company with good governance, strong ethics and values, he added.

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