iYogi, your personal offshore tech support, raises $9.5 million to undercut the Geek Squad @ 1-877-720-7609

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iYogi, your personal offshore tech support, raises $9.5 million to undercut the Geek Squad

When your computer goes haywire, you typically have to pay through the nose to make things right. Microsoft, for example, charges a per-incident fee of $59 for basic issues

Dan Kaplan, July 24, 2008

When your computer goes haywire, you typically have to pay through the nose to make things right. Microsoft, for example, charges a per-incident fee of $59 for basic issues, while an online or phone session with BestBuy’s GeekSquad will range from $70 to $270, depending on the severity of your needs. iYogi, an Indian company that provides outsourced, personal tech support for $119 per year, has raised a $9.5 million second round of funding to undercut its Western competitors and try to become a global brand.

While many services have been moving offshore for the last decade, most of them have been components of larger companies seeking to cut personnel costs on back-office jobs. But more recently, a handful of companies have gone offshore to offer services directly to consumers. Last year, we wrote about Sunday, a company offering 24/7 personal assistants based in India. There is also TutorVista, an offshore tutoring service charging $99 per month for unlimited sessions. iYogi’s personal tech support model is part of this trend.

The concept faces some obstacles. Dell® famously stopped employing Indian tech support after a number of customers complained about difficulty understanding Indians’ English, and this issue, along with angst about American jobs going overseas, is not easily addressed. But iYogi says it hopes to sell customers on its consistent performance. Vishal Dhar, the company’s spokesman, claims that its staff resolves 87 percent of problems and that out of its 50,000 customers, 93 percent are satisfied with its service.

iYogi offers support both over the phone and online, although currently only handles problems with Windows software. Soon, customers will be able to access transcripts and phone logs of every incident online. They will also eventually be able to deploy desktop software that will enable iYogi technicians to monitor customers’ computers for problems like spyware and viruses and fix them before the customer is even aware they exist. It also intends to offer data recovery. Dhar says the company has stringent processes in place to protect its customers’ data so that, unlike competitor the Geek Squad, iYogi will not steal your porn. Support for Apple is coming at some vague point in the future.

SAP Ventures led the round, which included repeat investments from Canaan Partners and SVB India Capital Partners. iYogi had previously raised $3.1 million, bringing the total raised to $12.6 million. The company plans to use the money to grow from 450 to over 1,000 employees by April and expand its focus from the US, UK, and Canada to Australia and then Singapore.