As solutions to global business growth barriers go, Prytek’s strategy is simple; let someone else lift out the operations. The multinational tech group, which builds and invests in technologies and delivering managed services, does the ‘lifting out’ through its Business Operating Platform-as-a-service (BOPaas) model, based on an eco-system of enterprises serving three core sectors; banking, education and recruitment.
As part of the Prytek corporation, these firms can create all aspects of the value chain for global clients via a package of related supplier services and technology that would otherwise be bought individually at higher costs, requiring more management and resources. BOPaas allows companies to maintain cost-efficiency and accountability across their operations.
From air marshal to VC
Prytek is the brainchild of entrepreneur and investment industry veteran Andrey Yashunsky, whose personal journey is almost as audacious as his professional story. In 1990, just before the collapse of the Soviet Union, Yashunsky’s mother took her two sons to Israel in search of a better environment to raise her children.
However, Israel in the 1990s was a tough place to grow up and armed conflict was the norm. In 2000, an 18-year-old Yashunsky joined Maglan, an elite unit of the Israeli special forces, before entering the Israeli secret service as an air marshal, protecting Israeli civilian flights.
“Air marshals need cover stories to maintain secrecy,” he says. “For mine, I claimed to be involved in fundraising for Israeli technology companies and running a boutique investment company.”
That company was called Prytek. By ‘networking in the air’, Yashunsky gained access to the startup scene, meeting new founders and global investors interested in a startup-friendly nation like Israel.
At the same time, Yashunsky studied economics and management at Tel Aviv’s Bar Ilan University and graduated in 2008, having closed dozens of deals with investors and built an impressive professional network.
The following year Yashunsky joined British investment company Jendens Securities before moving to an investor relations role with a Commonwealth of Independent States (CIS)-based bank. Here he finetuned his investor skills. He opened his own fund a year later, taking half the team with him and eventually merging his business into a U.S.-backed global private equity firm. In 2014, Yashunsky withdrew from CIS countries and built a global operations company: Prytek was reborn.
Lifting out operations
His initial idea for Prytek was to invest in B2B software solutions for corporates in operations, education, recruitment and finance, creating a one-stop-shop for Israeli financial services SaaS solutions. However, simply selling technology solutions was not as successful a venture as Yashunsky had hoped. The reason, he concluded, was that most end clients didn’t need another piece of software.
“Simply selling technology solutions is a losing battle; it requires a negative cash flow model due to market education,” he says. “Most technology companies at the initial public offering (IPO) stage run at a loss, and few are profitable. When it came to these types of businesses, the value was in the intellectual property, which is often appealing to strategic investors.”
For the banks themselves, he says, their ecosystem of software solutions can be bloated and unwieldy, containing, on average, 700 software providers. Tech solutions don’t necessarily guarantee a reduction in operating expenses.
Yashunsky adds: “While software vendors tout the potential efficiencies generated by their products, the reality is different. For every dollar spent on software, another $20 is spent on operating expenses because companies cannot simply fire employees once the new software is integrated. CEOs, therefore, do not see technology solutions as a panacea for spiraling costs.”
He realized companies needed comprehensive, end-to-end services from a single solutions provider, which would avoid integrating hundreds of software vendors and save money by reducing operating and capital expenditure. Prytek’s solution to global business growth barriers was to let someone else lift out the operations.
To date, Prytek has raised over $500 million. It has acquired and merged over 20 companies, with all founding directors remaining part of the Prytek journey, committed to creating a value chain solution, from technology to technology-based managed services. Global clients include Goldman Sachs, Deutsche Bank, IMG, Caterpillar, Credit Suisse and New York University.
As a platform for tech startup founders to inject their products and services into an integrated value chain solution and thrive as part of a broader ecosystem, delivering operations for entire industries, Prytek has come a long way since its origin as its founder’s cover story.
Yashunsky says: “Bringing together like-minded people has been the most rewarding part of my journey. The VC world can be lonely and single-minded in its goal, and I never thought I would be in a position to build a global company bringing a deeper level of value to an ever-changing volatile business world. I’m also thrilled to play the role of metapreneur, positioned between capital funds and companies and creating a platform for entrepreneurs to shine.”