In 1997, Valayil Korath Mathews flew down to Thiruvananthapuram from Dubai, where he worked as the IT head of leading airline Emirates, to establish IBS Software at Technopark, India’s first IT park. Then 40, Mathews kept the decision under wraps — only his wife knew about the decision to leave Emirates — as he quit a high-profile job and a luxurious life in the Gulf. In its 27th year, IBS Software is now valued at nearly Rs 12,000 crore, a successful venture made in Kerala.
In an interaction with , Mathews explains the journey and why Kerala is an ideal destination for high-end IT jobs Unlike today’s startups, I started IBS after 15-17 years of corporate experience. At 40, I had worked with Air India and Emirates, and understood the aviation industry’s problems in the 1990s. Despite being an early adopter of technology, the industry’s systems were outdated, built for a different era.
This unmet need, coupled with a small number of IT suppliers (only IBM and Unisys), presented an opportunity. With my industry expertise, I decided to establish a company providing cutting-edge technologies specifically for aviation. This motivation brought me to India, where technology was emerging.
Bengaluru, Chennai, and Pune were the hubs then. But a cousin at IIT suggested Technopark. In 1996, I visited Technopark, which spanned 100 acres with lush greenery and a few buildings.
Its scenic beauty and potential impressed me. I needed a location that would appeal to international customers, and Thiruvananthapuram fit the bill. During my visit, I met then chief minister E K Nayanar and Technopark officials.
Despite Kerala’s reputation for militant labour, their assurances convinced me to take a chance. That decision, made in 1996, was one of the best I’ve ever made. Kizhakkambalam, a quaint village in Ernakulam, gained prominence after Kitex was established there.
I began my academic journey at a local government school, later shifting to St Joseph’s School. I never found studying tedious and was reasonably good at academics. Football was another passion during my school days.
My undergraduate studies were at St Peter’s College, Kolenchery, renowned for its sports programmes. However, our time was marked by frequent strikes, and only three students from my batch graduated. I then pursued my degree at MA College, Kothamangalam.
After engineering, while my friends secured jobs, I opted for an MTech, an unconventional choice at the time. This decision led me to my professional career. During my IIT days, I was fascinated by hypersonic flights and aeronautical engineering, prompting me to pursue research.
I secured admission to the University of Texas at Austin without an interview, solely based on my professor’s recommendation. Unfortunately, I contracted jaundice and requested a deferment. Disclosing my infectious hepatitis condition led the dean to ask me to wait a year.
This unexpected turn led me to reconsider my plans. I chose to forgo IIT research and instead ventured into corporate life. I joined Air India during its golden era, immediately after JRD Tata’s tenure.
I would often marvel at the exceptional standards set by JRD Tata. The Air India building and its staff exuded a distinct professionalism. At the time, Air India was considered one of the world’s best airlines, particularly on the London-New York route.
It was famously known as the ‘flying kitchen’ and held the distinction of being the first all-jet operator. JRD Tata’s passion for the airline was evident, and remarkably, he worked without a salary despite the airline being 100% government-owned. When I joined, the management services department boasted an impressive 50 IITians, including gold medalists.
We had the collective brainpower to computerise the entire country. The department exclusively recruited IITians, some of whom were among the best in the world. However, over time, like many public sector undertakings, Air India’s standards declined.
Had I shared my plans with my family, I might not have taken the leap. Only my wife knew about my intentions. As general manager at Emirates, I enjoyed a comfortable life in Jumeirah, Dubai, with a villa, three cars — a Mercedes, Land Cruiser and a Lincoln — and a promising career.
I invested `1.76 crore, pledging our family property and securing a $1.1 million loan from Canara Bank.
I purchased an 8,000 sq ft office at Technopark for `76 lakh, a bold move considering many lessees had defaulted on payments. I confided in my friend M K Koshy of AVT, who facilitated local arrangements until I resigned and returned to Kerala. Keeping my plans hidden from my family was crucial.
.. I knew they would discourage me, especially my parents.
Securing funding was challenging. I first approached the Kerala State Industrial Development Corporation (KSIDC), led by Amitabh Kant, but they struggled to decide due to collateral concerns. Software companies didn’t have tangible assets like machines.
Federal Bank also declined, citing high risk. However, Canara Bank’s chief manager, Prabha, saw potential and offered support. He took my proposal and facilitated the loan in US dollars, crucial for importing machines.
Amitabh Kant later acknowledged that rejecting my proposal was KSIDC’s biggest mistake. Ironically, I now serve as a KSIDC director. Our first client was Swiss Air, which was largely due to my existing relationship with them from my time at Emirates.
We had established a joint venture between Emirates and Swiss Air, and they knew me well. When I started IBS, I reached out to them and highlighted the value we could offer. Two senior executives flew down to Thiruvananthapuram, impressed by our international-standard office, which was questioned by many for being overly extravagant.
We secured a substantial contract worth around $1.1 million with Swiss Air. Our second client was Emirates, again thanks to my connections.
Swiss Air remained a client until their bankruptcy in 2001. Notably, their consultants considered their investment in IBS one of the best initiatives, benefiting investors. I have never regretted my decision to establish IBS in Kerala, from either a business or personal perspective.
I arrived during the Left government’s tenure, when Nayanar was the chief minister and Susheela Gopalan the industries minister. We received unwavering support, which continued under subsequent chief ministers. Our focus on technology was a key factor in this sustained support.
Around 2005-06, we conducted a study on the demographics of IT employees in Kerala. The findings revealed that most workers came from Malayalam-medium schools, often from humble backgrounds, yet secured prestigious IT jobs. One remarkable example is the daughter of our driver, who became an engineer, joined IBS, and married someone working at a top accounting firm.
This represents a significant transformation, with entire families elevating their economic and social status within a single generation. Notably, we’ve maintained a perfect track record, with no days lost to hartals or strikes at either Infopark or Technopark. Major IT companies prioritise accessibility, social infrastructure, and ease of doing business.
Rural areas in Kerala are relatively developed, but growth will still concentrate around urban areas. Government-designated areas offer protection and streamlined approvals, making them attractive. Kerala’s higher education system faces criticism for outdated courses.
Your thoughts...
Educational institutions alone can’t equip students with industry-specific skills. Companies must upskill employees, a challenge for smaller firms. Industry-academia collaboration is crucial.
Academic autonomy for colleges and industry involvement in curriculum development can address outdated courses, enhancing employability. The need of the hour is for the state to prioritise creating successful enterprises and well-paying jobs. The government should take care to not get involved in direct job creation.
What it should concentrate more is on creating clean and safe Kerala and good roads. It should make the state a good place to live. Bring in welfare measures.
The flow of capital is a clear indication of the future of an area. Capital is needed to create meaningful jobs. If you want people at work, you need capital.
If a place has to progress, it should be able to attract and retain talent. The reason for America progressing so well is that everyone wants to go there to get educated and achieve success. If you look at Kerala, our share of the entire capital that came into our country is less than 0.
04%. Our educated boys and girls, or people with potential, are leaving and are being replaced by migrant labourers. We have roughly 35 lakh migrant workers here, and this number is expected to increase to 60 lakh, or one-sixth of our population, by 2030.
For us to be the finest place, we need clean Kerala, clean waters, safe Kerala, safe drinking water, and safe food. We should ask collectors or local self-government authorities how many well-paying jobs they have created, instead of blocking everything. We initially considered listing in the US due to the lack of comparable software product companies in India, making valuation challenging.
However, Covid and the end of Blackstone’s holding period delayed our plans. With Apex Partners now on board, we’ll wait another couple of years before reconsidering listing. Listing in India would have created wealth and made IBS a stock market darling.
.. Indeed, India’s stock market has delivered an impressive 8.
5% CAGR (compound annual growth rate) over 30 years, outperforming the US market’s 6.5% CAGR over 124 years. However, IBS’ growth surpasses both benchmarks.
Our initial investment of `1.76 crore in 1997 has grown approximately 6,000 times in 27 years, exceeding the returns of both indexes. There is an earnest attempt.
We have created certain positions, like IT fellows whose only job is to campaign and facilitate investment in the state. We review the campaign every two weeks. The CM is very eager and he is ready to do anything to attract investments to the state.
In reality, Kerala is only one percent of the Indian IT sector. The IT sector in India was around 57 billion dollars last year and ours was around 2.5 billion dollars.
I think there is a growing realisation that Kerala can be a destination for IT. There are four distinct advantages that Kerala has. First, high quality human resources.
Second, the infrastructure...
there are no infrastructural issues at Infopark and Technopark. Third, the most important factor for an investor..
. access to the executive and the bureaucracy. For example, it’s very easy to meet a minister or an executive official in Kerala.
Then last but not least, we’re in reality a politically and socially stable state. Similarly, if we look at the achievements of the state, we often tend to overlook the fact that SDI (sustainable development index) is the best, with least corruption, least poverty, excellent internet penetration, smartphone usage, etc. Kerala has a lot of positive things.
During disasters, we were a model to the world. It’s for a much larger cause. Kerala needs to promote football.
Interestingly, 30% of Indian viewership during the last FIFA World Cup came from Kerala. Our state has a rich football history, having won the Santosh Trophy seven times, including seven consecutive finals, since 1973. Many talented young players are forced to prioritise education over football due to parental pressure.
However, sports and entertainment are significant contributors to the global economy, offering lucrative careers. The Super League Kerala aims to professionalise football in the state, creating a transparent and model league and club. I’m happy that I have taken the Kozhikode franchise.
Because IBS is very much present in Thiruvananthapuram and Kochi, I have done all my activities there. Kozhikode is another place where we can do a little bit more. If you look at football, in northern Kerala, that is Malabar, there are a lot of football fans.
A lot of people asked me why I didn’t choose partners. A lot of people wanted to participate as well. I decided to set it up with the right values, culture, and process, and not everybody may subscribe to that.
Travel and transportation is a vast sector, accounting for 10% of the global GDP. We don’t need to explore other areas. To enter sectors like healthcare or financial services, we would require specialised domain knowledge.
In aviation, we have significant depth, and we’re expanding into hospitality. IBS has over 50% of the entire air freight market. Excluding large homegrown loyalty management systems and customer relationships, we hold around 25% of the world’s market share, representing some of the biggest loyalty programmes globally.
We’re establishing leadership in flight operations, reception operations, and crew handling. What’s lesser known is that we operate critical systems for the industry. If our system fails, Heathrow airport.
.. not just the airport, but entire Europe will be choked.
If our flight ops don’t work properly, in 15 minutes, it will be a ground stop in New York or in Dallas. We will be reported to the US FAA (Federal Aviation Authority). Similarly, 70% of all freight in and out of Australia are handled on our systems.
(Laughs) Is that a controversial question? Well, I’d say it this way: Kochi is growing faster, and youngsters might prefer it. However, when you have family and children, Thiruvananthapuram becomes more appealing. People settled in Thiruvananthapuram rarely leave, as it’s less congested and has fewer mosquitoes.
.. (laughs).
.. than in Kochi.
In terms of waste management, I think Thiruvananthapuram does a better job. We need professional waste management competence and capability. We are very similar to Singapore in terms of food and habits.
So the kind of waste that we produce is also something similar. And if Tokyo, with 24 million people, and Singapore can do so well, we should be able to do it. Reducing waste is a philosophy, but you must have centralised waste management.
It should be as automated as possible and professionally done. If you ask me what’s the number one priority for Kochi corporation, I would say waste management. The other is local transportation.
Drinking water is another one. My recommendation to the CM is that every legislator and every ward member should go through at least a week of education, as to what their job is and how best it can be done. Many of our leaders don’t know what their job is.
For me, life should be lived as if there’s no end. Many people, on retirement, feel their children are settled and there’s nothing left to do. That isn’t the right approach.
If you think that way, you’ll gradually shut down. I’m not suggesting being irresponsible and taking on unnecessary liabilities. IBS should survive and thrive beyond me.
We have the best of the board. We have a professional CEO. We are a complete board-run organisation.
My two daughters are learning to become responsible company owners, shadowing me. Running a company requires commitment, keenness, and capability – it’s a demanding job..
