31 Parallel: Turning Nine Bootstrapped Years into a Four-Round Funding Plan
Bhavana BollapragadaJunior Business AnalystA Himalayan outsourcing company that had never raised money from investors had to decide how much of itself to sell, in what order, and at what price.
Summary
- 31 Parallel, a Shimla outsourcing firm founded by Vivek Parmar and Karan Pal Singh Chauhan, grew for nine years without investors and then wanted capital to scale faster.
- SRF Capital Studio designed four funding rounds, from about ₹10 crore to ₹28.36 crore, and valued the company at 2.3 times revenue against comparable businesses.
- The founders now have a five-year model, milestones and uses of funds for every round, an investor memorandum, and a data room of more than 200 documents.
Who is 31 Parallel, and how did it reach SRF?
31 Parallel runs business process outsourcing, or BPO: it handles customer service, sales calls and back-office work for other companies. The name comes from the 31 degrees north line of latitude, which passes through Shimla, where the company is based.
Vivek Parmar and Karan Pal Singh Chauhan started the company in 2014. Between them they bring a Six Sigma black belt and experience at the outsourcing firm EXL and the law firm Amarchand Mangaldas.
The business works from two Himachal Pradesh towns, Shimla and Solan, and exports make up 95% of its revenue. Clients sit in the US, the UK and India. They work in e-commerce, logistics, travel, edtech, banking, financial services and insurance, and healthcare.
Clients pay per FTE, short for full-time equivalent: one person's full working time on the client's account. The company earns more when it fills more seats and gets more from each one.
By July 2023 it had 859 FTEs and more than 55 clients, all built without outside investors. Revenue stood at ₹18.69 crore when the engagement was signed. It had grown at a compound 52% a year since 2014, and by 90% after COVID.
That July the founders asked a legal adviser how to raise capital to grow faster. The adviser judged that legal help alone would not get them there, and referred them to SRF Capital Studio.
What was missing from a business that already worked?
The first conversations showed a strong operating business with no fundraising plan around it. The founders had not settled how much to raise, when, or at what value. They had no method they could defend for putting a price on the company.
Their story also needed work. Nine years of bootstrapped growth is impressive to an operator. An investor wants to know what new money will buy, and the founders had not yet written that down.
The gaps SRF found at 31 Parallel in July 2023, and the answer to each
| What was missing | What it cost the founders | What SRF built |
|---|---|---|
| A fundraising plan | No answer to how much, when, or at what value | Four rounds, each with a date, amount and dilution |
| A valuation method | No defensible basis for any multiple | A comparison with similar companies, giving 2.3 times revenue |
| A plan for growth capital | Growth held back by the cash on hand | A plan for spending the capital as the company grows |
| An investor story | Nine years of results not told as an investment case | An investor memorandum |
| A use of funds | No link between money raised and what it would do | Milestones and uses set for every round |
The brief that came out of this was specific. Raise growth money in stages, keep as much founder ownership as the plan allows, and tie each round to milestones and a stated use of funds.
How SRF built the plan, one phase at a time
Test the numbers before telling the story (July to December 2023)
SRF started with a diagnostic of the company's operating and financial record from 2014 to 2023. The team validated the 52% annual growth and the 90% post-COVID rise. It also assessed the 859-FTE operation and the portfolio of more than 55 clients.
Location was part of the test. Running from Himachal Pradesh gave 31 Parallel a cost advantage the engagement put at 30 to 40%. The engagement also pointed to the state's 82.8% literacy rate as a sign that the talent was there.
Capacity use, the share of available seats actually billed, stood at 85%, with room to rise.
With those checked, SRF designed the staged rounds.
31 Parallel's staged funding plan: four rounds totalling ₹60.54 crore
| Round | Planned date | Amount | Dilution | What the money is for |
|---|---|---|---|---|
| 1 | March 2024 | ₹10.42 crore | 25% | Clearing debt, expanding into satellite townships, becoming the main centre for major clients |
| 2 | March 2025 | ₹9.89 crore | 20% | Scaling operations, using more seats, adding clients |
| 3 | March 2026 | ₹11.87 crore | 20% | New locations, technology upgrades, a bigger team |
| 4 | March 2027 | ₹28.36 crore | 35% | International expansion into South Africa, advanced technology |
is the slice of ownership existing shareholders give up when new investors come in.
Each round in the plan has its own slice and its own job, so no single cheque has to fund everything.
Put five years of growth into one model (January to June 2024)
SRF then built a five-year financial model. It takes revenue from ₹18.69 crore to a projected ₹124.75 crore by FY28-29.
The model also links every round to its milestones. An investor can see what the company must achieve before it asks for the next cheque.
Build what investors will read (from July 2024)
The third phase produced the investor materials. The memorandum opens with a summary of what the company offers investors. It argues three advantages: the cost of operating from Himachal, an experienced founding team and a lean management structure.
It then gives the projections with their assumptions stated, followed by the use of funds and milestones. It also sets out the founders' records.
SRF also organised a data room, the shared folder investors use to check a company's claims. It holds more than 200 documents across six groups: corporate, financial, commercial, legal, technical and HR.
Why price 31 Parallel at 2.3 times revenue?
A revenue multiple values a company as a number of years of its sales. SRF built the 2.3 times figure from comparable companies, so the founders could show where it came from.
The engagement placed that against an industry multiple of 2.7 times. It put the multiples paid by strategic buyers, companies purchasing a rival or supplier, at 2.7 to 3.7 times. Entering at 2.3 times gives an investor a margin of safety below both.
The model projects investor returns of 3 times in two years, 5 times in four and 7 times in five. These are forecasts, and they rest on the milestones being met.
For a company raising for the first time, an entry price below the sector multiple is easier to defend than a stretch. Later rounds can then be priced on milestones already reached.
What does the plan give the founders, investors and the business?
The founders have a plan that weighs growth against ownership, with milestones for every round. They also have investor-ready materials and models, and a route from Himachal to markets abroad.
Investors are offered an entry at 2.3 times revenue, stated return projections and a platform that can take on more work.
The plan clears debt to improve margins, puts working capital to better use, and takes expansion from satellite townships to South Africa.
This case covers the plan and the preparation for raising. It does not report how much money has been raised against it so far.
Should a bootstrapped company raise in one round or several?
Most founders in 31 Parallel's position think about one number: how much to raise. SRF's view is that the order matters as much as the size. A company that has grown without investors usually has more choice about timing than it realises.
- Split the raise when the business can hit visible milestones in between. Each later round can then be priced on results instead of promises, which usually means selling less of the company per rupee raised.
- Give every round a distinct job. Clearing debt, filling seats and going abroad are different bets, and investors find each easier to judge on its own.
- Price the first round so it can close. An entry below the sector multiple, as 2.3 against 2.7 is here, costs some value up front and gives investors a margin of safety.
- Turn your location into numbers. A cost advantage of 30 to 40% is a claim until it shows up in the model's margins and in revenue per seat.
- Check your own growth figures before an investor does. A growth rate is worth quoting only once someone outside the founding team has tested it.
- Build the data room before the first meeting. A folder of 200 documents takes weeks to assemble, and a slow answer during checks costs trust.
This is the work our VC and PE fundraising team does with founders. If you are not sure you are ready, start with a fundability assessment or our investor readiness support. For the document side, see how we prepare a data room. For the wider picture, read how startups raise institutional funds.
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