http://www.redherring.com/vc/2000/0717/vc-dealflow071700.html



Dealflow: Labor importer Peak XV brings home $21 million
By the Dealflow Staff
Redherring.com, July 17, 2000

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DEALFLOW DASHBOARD/ July 17
B2C: Military.com
COMMUNICATION SERVICE PROVIDERS: Cogent Communications, $90M; Newsouth
Communications, $170M
INCUBATORS: 100x, $100M
INTERNET CONTENT: Dotcomix, $8.5M
INTERNET SOFTWARE: AskAlex, 8.5M GBP ($12.9M)
FUNDING NEWS: SEC allows MeVC to invest in DFJ's affiliates
DEALFLOW DIGEST: Exenta, $1.25M; Resorts Sports Network, $20M; Touch
Clarity, $1.5M; Xpenswise.com, $3.8M
ELEVATOR PITCH: Meteor Mobile, $250K


DEAL OF THE DAY: PEAK XV NETWORKS, $21M
Peak XV Networks calls itself an outsourcing entity, but it looks more like
a human-capital management service. It trains engineers in Bangalore, India,
brings them to the United States on H1B visas, and finds them IT gigs. Peak,
based in San Ramon, California, makes its money by charging management and
engineering service fees, and also fees for what president Ashok Murthy
called "interoperability studies." It doesn't pay its contractors by the
hour, but by the project. America isn't the only destination for Peak's IT
talent; Europe and Asia are also on the itinerary. CEO Nelson Abal scoffs at
the notion that Peak XV is just a labor import service, instead pointing out
the similarities his company has with Marc Andreessen's outsource service
provider, Loudcloud.


At Peak, quick profits are the name of the game. Despite being founded last
December, the company has pulled in $5 million in revenue, says Mr. Abal.
Says Mr. Murthy, himself a native of India who came to the States as a
13-year-old: "We hope to turn a profit and break even within [the next] nine
months." He appears to be well on his way, and the new recruits presumably
will keep rolling in, hoping for their slice of the American dream.


INVESTORS: Doll Capital Management ($8.4M. lead); Oak Investment Partners;
E4E Ventures.



by Richard Byrne Reilly