The Zodius Capital-backed Allygrow Technologies has made two global acquisitions which help give it a highly specialised service portfolio spanning concept engineering to manufacturing support for customers globally. Prashant Kamat, founder and CEO, Allygrow Technologies, reveals the company’s growth game-plan. An interview by Amit Panday.
What are the type of services that Allygrow Technologies provides to the automotive industry?
Allygrow Technologies is a provider of engineering services to automotive, aerospace, hi-tech, medical devices and heavy industries. We founded the company six months back with $ 20 million funding led by Zodius Capital.
Within a short span of its inception, Allygrow acquired Germany-based AE Automotive Elements and the engineering services arm of US-headquartered Ranal. The investment in the two companies will help us foray into international markets and build a highly specialised service portfolio spanning across concept engineering to manufacturing support for customers globally.
Allygrow envisions establishing a strong ecosystem that fosters the right blend of high-end competencies and global delivery excellence to help customers transform ideas into world-class products and solutions.
Who are your current customers in the automotive domain?
Allygrow brings expertise of working with leading OEMs (original equipment manufacturers) and Tier 1s globally. These include auto players like BMW Group, Daimler, Magna, General Motors, Caterpillar, KUKA and Valiant, among others.
What is the game-plan behind your recent acquisitions?
The acquisitions are in line with our inorganic growth strategy to build specialised capabilities, increase global footprint and gain direct market access.
AE Automotive Elements significantly strengthens our capability in product development with its competence in interior and exterior systems and vehicle body-in-white (BIW) development. With this acquisition, we have also established presence in the European market while bolstering our delivery offerings to Indian and international customers.
The deal with Ranal in addition will build Allygrow’s competency in manufacturing engineering space. Allygrow will benefit from Ranal’s multi-location delivery setup (in US / Detroit) and India (Bangalore & Pune), access to local talent, and ready customer-base in Americas, Europe and Asia.
What is your five-year growth plan?
Our aim is to reach US$ 100 million in revenue over the next 4 to 5 years and build domain expertise in verticals such as aerospace, medical technology and embedded space along with automotive.
What is your growth strategy in automotive operations specifically when the market is down?
A de-growth in auto sales actually opens up multiple opportunities for core engineering service providers like us. In such a phase phase, auto OEMs and Tier 1s start focusing on parts commonisation, launch of products with minimal modifications (facelifts) and introduction of high-value features (which are developed at lower cost).
This is where Allygrow can add value and take on turnkey projects including execution of entire facelifts, parts commonisation programs, value engineering etc.
With diversified skillsets and global delivery capabilities in high-end product design and manufacturing engineering, we will be able to support customers for executing projects end-to-end with value additions, and best cost.
Within the wide array of automotive ER&D services, which areas would Allygrow Technologies specialise in?
As a pure-play Engineering Research and Development (ERDS) firm, Allygrow will specialise in service spanning across concept engineering to manufacturing support.
With the acquisitions of AE Automotive Elements and engineering services arm of Ranal, we are able to leverage complementary strengths of each entity to cover the entire gamut of engineering services for customers globally.
How do you perceive your competition in this domain? ER&D area has big giants such as Tata Technologies, QuEST Global and others?
Industry reports estimate the Indian automotive ESO market to reach US$ 9 billion by 2020. We believe that there is enough room for everyone to play, with huge opportunities for a company like Allygrow which operates in the pure play engineering services space.
In your opinion, what differentiates Allygrow from the others?
Allygrow was conceptualised, and is led by a team of engineers who have passion for core engineering. This team is backed with hands-on experience in R&D and pure-play engineering services making us a preferable partner for our prospective clients.
Allygrow aims to be a leading pure play engineering service player with expertise in chosen verticals and hence the two acquisitions done are in line with the strategic plans of the company. In the near future, the company also plans to expand its service portfolio in aerospace, medical technology and embedded space.
As a startup, the company has put an aggressive organic and inorganic plan in place. It secured a funding (US$ 20 million) led by Zodius Capital just when it got incorporated. Furthermore, the second round of funding for the next set of acquisitions is also being raised.