Key Management Group (KMG) in India has announced the acquisition of a 76 percent equity stake in Chavan Software and Services, a German private company that specialises in developing custom made solutions and providing outsourcing services to medium companies. Through the new venture, which will be named as KMG Chavan Software Services GmbH, KMG plans to enter the insurance and re-insurance market in Germany and the rest of Europe.

The new German-based venture will cater to the insurance industry in Germany, Austria and Switzerland, by providing complete IT solutions and consultancy services.

Chavan Software Services has a turnover of $2 million. KMG in the US has the rest of 24 percent equity stake in Chavan Software Services.

“The revenue target for the year 2003 is 3 million Euro. To scale up the market, India is the best place as it is the resource base,” says KMG chief executive officer Subhash C Bhatia.

The company in India has revenue of $1.6 million and the US generates revenues of $0.6 million. KMG is expecting $2-5 million dollar from venture capital funding in 2003. Presently it has 80 professionals in the US and 60 in India, which the company plans to increase to 200 by 2004.

“Though BPO is the hot market now, we have not entered the segment yet. We have given a proposal to the Hindujas and are in serious negotiations with them,” said Bhatia.