Turkish software giant targets Indian SMEs


Logo Software, part of Logo Group, a former startup company that has since become Turkey’s largest independen­t SME software group, is now investing in SMEs in India, Romania and Germany. Tugrul Tekbulut, the founder and chairman of Logo Group, said the group is currently valued at $400 million and aiming for $1 billion.

Logo recently announced its decision to start investing in India, one of the world’s major software developmen­t centers and Tekbulut said the origins of the investment came about via an Indian on the board at Garanti Bank in Turkey. “He bought shares from us. They were not even TRY 2 in those days,” said Tekbulut. “He said to me, ‘I have not seen the innovation I see here in any other country. So much

innovation can be taken to India.”

After that, Logo built software for an internatio­nal food-distributo­r giant, which won a world’s ‘best practice’ award. Then it decided to apply the model in countries such as India, Vietnam and Malaysia. “These two developmen­ts gave us courage,” said Tekbulut. “Our biggest resource in Turkey is flexibilit­y. We have to be a pragmatic, skillful human community. Our endurance comes from an approach that always ‘finds a solution.’ You do not see this in other developing countries. They are variously known as a natural resource country or a human resource country. Our skill is that we can sustain vitality: it’s Turkey’s point of difference. For this reason we thought we should do business in developing countries. This is the philosophy behind our investment in India. We formed a partnershi­p with our Indian investor, opened an office in Mumbai and now 15 of our friends are working there.”

Despite having started business in the one of the world’s most populous countries, Tekbulut doesn’t believe gaining success in India will be easy but sees huge potential for the future. “It will be difficult to break into the Indian market,” he said. “We are trying to sell the projects we produce here to Indians. The infrastruc­ture in India is so bad, the last two years have seen important developmen­ts and our connection­s are starting to reap rewards. The software companies had the internet, but the situation in the cities was so bad.” Tekbulut is hoping to work more with new VAT and e-billing laws that were put in place in India on Aug. 1. “Selling goods from one state to another had become difficult,” he said. “As soon as we went, we built our system and got it working on Aug. 1. We’re even better than some local companies. The e-archive bill, which was passed in India, has entered the system. So, Turkey is becoming a bed of innovation. Any method we develop in the fight against informalit­y in Turkey is also valid there.”

So will India be the first step in Logo’s bid to enter further countries? “If we can establish this investment in India, it will provide a good platform from which to enter other countries,” he said. “It is difficult to say our address is Turkey only. At the moment we have an internatio­nal vision, which may or may not be successful. India is a highly protective market and thus not very open to foreign investors. There are billion-dollar companies in India, but they are not interested in Indian SMEs and our target client is SMEs.”

Tekbulut said the most important investment­s in Logo’s business plan are mainly found in Romania. “Foreign competitio­n has been heavily pressing us from 2000 to 2010 as customers went to our foreign competitor­s. There was strong consolidat­ion in the world,” he said. “I now see we had a problem in our vision and this period represente­d a pause for us. At that time, giant global software companies bought small local companies. We experience­d the 2008 crisis and saw that our customers wanted us to serve them. Each country has its version of Logo. They either sold out or went bankrupt. When they were not being consolidat­ed, we decided to use this potential.”

Indeed, Logo had its share of offers during this period of consolidat­ion. “The offers were coming every day. But they were so low,” said Tekbulut. “We sought a lot of investment but they teased and dismissed us by saying, ‘Turkey is not a place to invest.’ But our clients kept us afloat. Then we saw a trend favored us. We noticed the potential. This is a good retail solution because if I could make customers in Turkey happy I can make customers happy everywhere. We built our strategy on this.”

“We can say that we bought Romania’s version of Logo,” added Tekbulut. “It was a company worth 20 million euros that sold software to SMEs. We are now focusing on that company. We will lead them to produce products. This is our know-how. There is a characteri­stic in our country that people want to get the best of everything. They say to the local company, ‘If you cannot do that, I will not use you.’ We have strong qualities in Turkey that we are not particular­ly aware of. Now, once we have taken this know-how to Romania, we will be able to extract products from there to around the world.”

To that end, Logo is planning a growth line, with Germany strongly in mind. “We will make new purchases abroad. We are displaying our Logo company in Frankfurt, a place that is central to financial software. From there, we aim to sell software to the entire financial world. Domestical­ly, we are going to continue to grow with an R&D focus,” he said. “SMEs are our main emphasis. Turkey is growing and SMEs are growing. Now we want to tell SMEs ‘the period of innovation has come.’ We now need to grow our customer base.”

Tugrul Tekbulut

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