Mexican software firm Softtek has acquired Itarvi Consulting to gain a larger foothold in Spain’s lucrative IT services market and capitalize on the growing demand for digital transformation services throughout the Spanish-speaking market, including Latin America.
With Itarvi in tow, Softtek wants to gains access to Spain’s large financial services firms as well as Latin American multinationals expanding in Europe.
“Itarvi has huge operations in the capital, Madrid, which is not only the government capital but also the country’s financial capital. Moreover, Itarvi has a large number of clients in Spain’s financial services sector,” said Alex Camino, chief marketing officer of Softtek.
Softtek already has a global delivery center in Spain, but its office is in the northeast corner of the country, in Corunna. Most of the country’s large financial firms are based in the capital Madrid. “Having a better presence in Madrid will help us gain access to multinationals,” Camino added.
Softtek has operations in Spain, the Netherlands, and the UK. It also serves countries such as France and Italy, although it does not have a direct presence there.
Telefonica and BBVA Bancomer are examples of large Spanish companies with big operations in Latin America. Softtek, a leading nearshore IT outsourcing firm from the Americas, already serves several of Europe’s top multinationals among its clients. The main reason it acquired Itarvi was to better serve the Latin American multinationals expanding into Europe.
It seems Softtek thought Itarvi is the right pick for its expansion in Europe after it found the Madrid-based firm serving as IT partner for some of its own Latin American clients in Spain.
“By adding Itarvi Consulting to the team, Softtek strengthens its position as the ideal partner for companies on both sides of the Atlantic,” said Blanca Treviño, President and CEO of Softtek in a press release.
Although its operation is limited to Madrid, Itarvi Consulting specializes in agile software development, and has considerable expertise in digital transformation solutions, something Softtek is looking to make the most of to expand operations in Europe. “We are not worried that Itarvi is small, because we know we can provide scale. Itarvi connects us with large financial services firms in Spain,” Camino pointed out.
Across Spain, banks are avoiding opening branches in rural areas and going digital, while consumers are increasingly banking online or on mobile. Thanks to digitalization, Spain’s large bank BBVA has suddenly started making profit after reporting US$953 million loss in the fourth quarter of 2013.
According to French analyst firm PAC, digital transformation software and services currently account for about 9.5% of the overall software and IT services (SITS) market in Western Europe. The analyst firm expects the market to grow at a compound annual growth rate of 11.2% between 2013 and 2017.
“We also have great experience in digital transformation,” says Camino. “We created a digital solution for a foreign commerce entity in Mexico. Before we created it, a financial transaction would take days before it is checked and approved by several government agencies. The application we developed has now created a single point of contact for all agencies, speeding up the official process significantly.”
This is Softtek’s third acquisition in the last three years, the other two being SAP service provider Systech Integrators and SCAi. Softtek is one of a few Latin American multinationals reporting double-digit growth continuously over the past decade.