Wizeline, the global services technology provider founded by Mexican-American entrepreneur Bismarck Lepe, has taken a giant step towards its expansion goals after Caisse de dépôt et placement du Québec (CDPQ) purchased a majority stake in the firm.
CDPQ, a fund management firm that manages hundreds of thousands of Quebecers’ pensions, acquired majority ownership in Wizeline from Apax Digital Fund. Apax will remain on the board and on the cap table.
Though the deal has not yet been formalized, company sources say it will be closed “quickly”.
With the additional financial thrust of CDPQ, Wizeline can now work towards its expansion aims and continue its rapid growth that has seen the San Francisco-headquartered company enter EMEA and APAC, as well three locations in Mexico, Lepe told Nearshore Americas.
“CDPQ is one of the largest fund managers in the world and manages about 80% of the pension funds of Quebec’s population. They give us the wherewithal to continue to scale aggressively and to look at other investment strategies that they may be able to fund. They’re very excited to be able to do that,” he said.
The Wizeline-Apax partnership proved to be a fruitful one. But the additional brawn of CDPQ can provide Wizeline with the financial foundation to pursue scaling more aggressively. As of June 30 2021, CDPQ’s net assets stood at a value of CAD$390 billion (approx US$309 billion), considerable growth from its CAD$271 billion (approx US$215 billion) in assets just five years ago.
“We look at the two sides of our business, the commercial side and the delivery side, and we want to make sure we continue to invest on both. From a delivery standpoint, we’re already in the three major geographies, while on the commercial side, The Americas continues to be the biggest and most important region, though EMEA is developing very quickly,” Lepe explained.
Aside from the financial power that CDPQ brings to the table, the equity firm’s rootedness in people means there are clear synergies in the new partnership.
“CDPQ manages around 80% of the pensions of the population of Quebec, and so unlike lots of other funds, it’s very easy for us to see that we are working for a group of people. This fits with ‘the whys’ that we need, of doing well by doing good,” said Lepe.
Wizeline’s Academy, which so far has graduated over 25,000 students, provides free tech courses on in-demand skills to aspiring tech professionals in Mexico, Vietnam and the US. The company promotes diversity in tech through courses like the Women in Leadership certification or #WeLoveIT events. Promising professionals can then go on to work directly for Wizeline.
“One of the ways we try to do good is via the Academy. We don’t believe in arriving to regions and exploiting the talent that’s already there; we believe in investing in the population. We will be continuing to invest in the Academy programs. Once we have a good body of talent, we tap into it and start to deliver for our customers,” said Lepe.
A Market Poised for (More) Growth
Founded 2014, Wizeline employs around 1,400. Now, the company’s cloud, DevOps and AI services are in greater demand than ever before. With the much-talked about ‘digital transformation’ being undertaken by companies worldwide, the market is ripe for Wizeline’s services. According to recent estimates, the digital transformation market will reach US$1,302.9 billion in value by 2027.
Less than 25% of total compute is being done in the cloud — Bismarck Lepe
“A lot of the public companies in this space are trading at high multiples because the space is seeing a lot of growth,” Lepe said. “Less than 25% of total compute is being done in the cloud. The entire process of lift and shift, modernization and the development of new applications means that there’s going to be a tremendous amount of growth here for the foreseeable future. Our position in Latin America and the brand we’ve built gives us a unique position to be a very big player in the biggest market for IT services, the US.”
Cloud-native since its inception, Wizeline aims to remain at the forefront of the digital services industry, leveraging the cloud’s capacity for exponential scaling. “We want to make sure that we continue to hold onto that position as a very pure play, digital, cloud-based service provider to remain at the forefront of new technologies and innovations,” said Lepe.
Big Plans for the Future
CDPQ’s arrival will not affect the management team nor the governing structure of Wizeline says Lepe.
“We’re going to continue to operate and execute as usual, following the same principles that have successfully gotten us this far,” he said.
Though the acquisition won’t impact the day-to-day, it does push the company onto new horizons, said Danielle Ruess-Saltz, Chief Marketing Officer at Wizeline.
“We already have great Fortune 500 and Global 2000 clients, but this is the next step in our evolution. CDPQ was the right fit for us, and our people feel very comfortable with the announcement,” she said.