Taking Wings from Kerala

A Financial Express Feature on Mr.V K Mathews

VK Mathews is a rare individual—one of the very few who dared to show off his entrepreneurial skills in Kerala. In fact, his friends thought he was nuts to leave his plush job in Dubai with Emirates where he spent more than a decade, to return to his roots and start an IT firm against all odds.

IBS, the company he founded in 1997, today is Kerala’s best known IT company and credit for that should go to this man who took a big chance with his career. “I was very happy with Emirates, where I was provided with a luxury villa, and I also had the choicest of cars with me. At that time I was just around 37 years and most people of that age would have been content,” says Mathews, who has a post-graduation in aeronautical engineering from IIT Kanpur.

It’s not that he always wanted to be an entrepreneur. But when he saw the big opportunity waiting to be tapped in the software space of the transportation industry, especially aviation, he could not resist the temptation. Today IBS is one of the world leaders in transportation software and the vast majority of global airline majors are its customers. “To be honest, I was never after amassing wealth. Even my decision to become an entrepreneur was not charged by that. But I always wanted to do my best in whatever I was doing. That led to the decision.”

Soon after passing out of IIT Kanpur, he did something many wouldn’t. He started teaching computer science to army officers. “I found that quite tough to do. The subject was indeed new to them, and they were also more interested in warfare and artillery.” He joined the IT division of Air India in 1981. That was the start of a successful career. Mathews played a key role in the implementation of its computerized passenger services system globally. It may seem a simple thing now, but 30 years ago it was an achievement.

Shortly he got a good offer from Emirates and he decided to grab the opportunity to get the international exposure he desired. As general manager (IT) of the Emirates Group, Mathews was responsible for formulating and implementing software strategies for Emirates’ global operations. “Emirates were then a start-up company. But the chairman had great ambitions to make the airline one of the worlds best, even back then. Working with Emirates gave me all that I needed.”

That was why everyone was shocked when he decided to become an entrepreneur. “My friends did not think it was a wise decision. So I never told them that I was considering Kerala as the headquarters of my venture. If I had told them so, they would have really discouraged me. I first went to Bangalore and then Chennai.

But after I visited the Technopark in Thiruvananthapuram, I instantly took the call to set base here.”

Mathews invested Rs 1.75 crore from his pocket and then raised a few more crores to kick start his dream. Initially IBS won contracts through Mathews’ personal contacts. But he knew it was important to develop internationally acclaimed mission critical systems to compete globally.

Emirates and Swiss Air became his customers and things started to roll smoothly, till the dotcom bubble burst. Then came the tragedy of 9/11 and the aviation industry was facing its biggest crisis. His customers like Swiss Air collapsed financially and he started doubting the business potential of his venture. He had two options—one was to wind up operations and save some of the profits, or plunge into the business neck deep and take a chance. He opted for the latter.

Today he is reaping the benefits of that decision. The Kerala government is pinning its hopes on IBS becoming a global software leader and improving the image of the state. “Kerala has to develop a good physical and social infrastructure. That would be key for the development of the software industry in the state. It is now difficult to attract senior management talent from other big cities to Kerala. But the talent we have is world class and there are no worries on that count.”

The company today has revenues in the range of $80-100 million and is planning an IPO in 2012. Along the way, Mathews has gone in for a few strategic acquisitions and today IBS offers software products in areas of airline operations, airport management and airline cargo, oil and gas logistics, cruise and hospitality management along with ocean transportation. General Atlantic has invested $60 million in IBS. And that’s the biggest PE investment made into a Kerala-based company. Its new generation cargo management solution i-cargo is making waves worldwide. IBS has arrived on the international scene.

Today Mathews is an advisor to the government of Kerala in areas of IT, management and education and a member of the state’s IT advisory board. He is the president of GTECH, a strategic grouping of IT&ITES companies in Kerala, which is modeled on the lines of Nasscom.

His ambition now is to make IBS the number one company in the travel, transportation and logistics (TTL) software space globally. “By year 2020, I want to achieve that dream. I believe we have all the tools for it.”...