Egar Technology

completed

Egar is a financial technology company founded in March 2000. The company develops highly specialized capital markets and risk management information systems, including off-the-shelf software products and customized solutions and consulting services. Egar targets trading and risk management departments of large banks, corporate treasuries, and specialized smaller and middle market financial institutions. The company blends Russian software development and mathematical talent, and US business development and managerial know-how. The Russian base of the project gives Egar a competitive cost structure and access to professionals with highly developed quantitative skills which are critical to the development of risk management tools. The purpose of the proposed project is to improve product development and R&D, expand its Russian development centers, build up sales and marketing infrastructure, and its working capital needs.Russia is in the midst of developing the skills base necessary to compete in high-technology exports. This project will support efforts to catalyze growth and development through high-end services exports, creating quality jobs, and acting as a symbol of the benefits of continued reform, opening up support for education and partnering with western organizations and professionals. The project will have significant developmental impact by potentially creating hundreds of IT related jobs in Russia. The company currently employs about 100 people in Moscow and has recently opened a second development center in Nishny Novgorod. In 2004 Egar expects to employ about 350 people in Russia. Egar will also contribute to train skilled technology workers in Russia by exposing them to best practices from U.S. based technology firms. There is, at present, a shortage of qualified managers in the IT sector in Russia. This is a significant bottleneck to further the technological development across the country, since most companies , particularly small and medium enterprises, do not have access to U.S. and western European technology expertise. Finally, Russia and Eastern Europe will also be important target markets for Egar, contributing to the improvement in the efficiency of financial institutions in this region through providing state-of-the-art technology and services.IFC’s investment would support a company that creates intellectual property and provides highly specialized software services to companies globally, from a production base centered in a developing country with highly qualified human resources. IFC would play a critical role in bringing in other investors, for the current as well as potential future rounds because of concerns regarding country risk. The scarcity of capital available for projects such as this, from private U.S. sources, is demonstrated by the fact that the company has only been able to raise financing from a Russia based institution funded by USAID. Finally, IFC would bring its global knowledge of financial institutions as well as software services industry.