For decades, investors have preferred product companies over services firms for one reason: products scale non-linearly, while services grow only as fast as you can hire. Sathya Pramod, former Chief Financial Officer of Tally Solutions, believes AI-native services firms are about to break that rule. In a conversation with Shradha Sharma, Founder and CEO of YourStory and The Bharat Project, the chartered accountant explained why he has rebranded his Bengaluru-based advisory firm KayEss Square as Northbound Advisors, and why he is preparing a larger fundraise to buy up smaller firms and serve them all with AI.
Pramod's vantage point is unusual. Before turning advisor, he spent time at Deloitte and EY, ran finance for AOL International across 32 countries, and served as CFO and head of legal and taxation at Tally, one of India's best-known software companies. In 2017, he co-founded the advisory firm with former Tally legal head Shivadutt Bannanje, after watching promising startups they had invested in collapse because compliance and financial discipline took a backseat. The firm has since worked with around 250 companies, spanning CFO advisory, due diligence, transaction advisory, legal, tax and risk, and raised Rs 10 crore in a pre-Series A round led by Vakil Housing about six months ago.
The maths of scale in professional services
The constraint Pramod is attacking is as old as the profession itself. "There's only one partner, that partner has 10-12 hours a day. How can we actually deliver to 25 different companies?" he asked. Five years ago, he said, he routinely turned clients away because time was the only inventory he had. With AI handling substantial parts of the work, that inventory expands, and partner hours shift towards face time with clients rather than production.
The firm is building a proprietary AI tool with a partner, trained on eight years of work across diligences, CFO advisory, legal, tax and risk engagements. Pramod is clear-eyed about why he is not simply plugging into off-the-shelf models. Clients fear their data ending up in the open where competitors might benefit, he said, so the firm is building an in-house ecosystem where client data stays protected while the underlying models, whether from Anthropic or others, deliver the same results. For now, he has no plans to monetise the tool as a product. The point is delivery at scale.
That is where the roll-up strategy comes in. The planned larger fundraise, he said, would let Northbound acquire 8 to 10 firms in adjacent areas, instantly adding one to two hundred customers, all served through the AI-enabled platform. The firm is also adding a legal practice, with a couple of partners who recently left large law firms, and a global capability centre practice to be led by a senior professional joining from one of the Big Four. Pramod is careful about the positioning: Northbound will not take the Big Four head on, but will go after the early-stage and midsize market they cannot serve profitably with their cost structures.
What does it mean for a services firm to be AI native
Being AI native, in Pramod's telling, is not bolting a chatbot onto an existing practice. It means designing the firm's delivery model around AI from the start, so that the knowledge accumulated across hundreds of engagements becomes reusable infrastructure rather than something locked inside individual partners' heads.
The practical difference shows up in capacity. A traditional firm adds revenue by adding qualified professionals, which is slow and expensive. An AI-native firm can take on more clients per partner because routine analysis, documentation and compliance work are increasingly automated, leaving humans for judgement, negotiation and trust.
Shradha noted the investor implication directly: services firms are re-imagining themselves, and there is now a quicker way to scale a services business, a quality investors have historically reserved for product companies.
None of this softens Pramod's diagnosis of the ground reality for Indian founders. Compliance, cash flow and books maintained to global standards remain the most ignored disciplines, he said, and he has watched good companies fall hard for neglecting them. He was equally blunt about the environment: "In India, running a business is not a joke," he said, pointing out that despite schemes like Mudra loans, banks rarely engage without a three-year track record.
The larger question his experiment raises is whether India can finally produce homegrown advisory institutions with global ambition, a gap he attributes to an era when scale, playbooks and best practices were proprietary to Western firms. With information now democratised and AI compressing the cost of delivery, that moat is draining. If Northbound's fundraise and roll-up plan land as intended, the next few years will test whether an AI-native services firm out of Bengaluru can do what Indian advisory firms have never done: scale like a product company.
Source: YourStory - Startups
