Pure Software, Aureus deals to drive growth in RoW region: Happiest Minds’ cofounder

The two major acquisitions made by IT services firm Happiest Minds Technologies in 2024 – Pure Software and Aureus Tech Systems will help the company enter newer regions and fill the white spaces in customer portfolios. “We will rely on Pure Storage and Aureus to drive our growth in the Rest of the World regions for the next couple of quarters,” said Joseph Anantharaju, co-founder and executive vice chairman told TechCircle. 

To be sure, Happiest Minds acquired US-based Pure Software in April for $94.5 million to strengthen its domain capabilities in banking, financial services and insurance (BFSI) and healthcare. A month later, the company announced the acquisition of Aureus for $8.5 million for product and digital engineering services. Apart from the two companies, Happiest Minds in April, acquired 100% equity interest in Macmillan Learning India, a wholly owned subsidiary of the Macmillan Group, USA.

Acquisitions open new markets

Anantharaju said that the Pure Software and Aureus acquisitions have opened up newer markets for the company. “A significant portion of business for Pure Software comes from Southeast Asia, including Malaysia, Singapore, and Hong Kong. They serve banking and financial services companies in that region. They have established customers in Kenya, Ghana, and South Africa—markets we hadn’t even considered entering before. Additionally, Aureus has a customer in South Africa that complements Pure Software’s presence in the region. Now, we have a presence in both of these geographies, gaining a solid understanding of the local landscape, including which services to offer on priority.”

In its financial results reporting for the first quarter of FY25, Happiest Minds announced that the Americas grew by 6.9%, Europe by 8.5%, and India along with the Rest of the World saw around 6% growth.

Ananatharaju said that Happiest Minds is bullish about India. “The overall growth rate we're seeing, coupled with the shift towards a more consumer-oriented economy, will create a lot of opportunities. Companies now are viewing technology as an essential enabler rather than a luxury, which means we'll see more and more opportunities in India, across the board.”

$1bn by 2031

In Q1FY25, the company’s revenue grew by 18.7% year-on-year and 11.5% sequentially. Net profit on the other hand encountered a decrease of 29.11% quarter-on-quarter. The company attributed this decline to non-recurring expenses incurred during this quarter, with a significant write-back in the previous period, as well as heightened amortisation and financing costs associated with recent acquisitions. Further, the headcount increased from about 5,000 in Q4FY24 to 6,700 in the first quarter of this fiscal year. The growth in employee numbers came largely from the acquisitions (~1,300).

During the results presentation in August, executive chairman Ashok Soota said that FY25 is poised to be the company’s best performance since IPO in 2020. He also said that he is optimistic about the company's long-term goal of achieving $1 billion in revenue by FY31, relying on the new generative artificial intelligence (AI) business unit and the success of its acquisitions.

At the beginning of the year, Happiest Minds introduced a new business unit dedicated to generative AI. “Our expectation is that this unit will become a significant growth engine for us in two ways. First, it will generate revenue, but more importantly, it will help us acquire new customers, differentiate ourselves with existing clients, and drive cross-selling opportunities,” said Anantharaju.

He further added that they have 20 generative AI proof of concept (PoC), and have already implemented three or four of them. The key for us now is to transition these PoCs into full-scale implementations. “We carved out this business unit to ensure focus, responsibility, and accountability. This way, we can make the necessary investments while holding the unit accountable for its own revenue generation,” concluded Anantharaju.