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April 29, 2016

Ujjivan Microfinance IPO: Payback Time for Impact Investors. Again?



Catch the Original Payback Time article of PE/VC Investor Returns in  Equitas Holdings IPO here and here.


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April 27, 2016

The Road to Series A Just Got Longer & Harder

Deepak Gupta, Co Founder of early stage investment platform Equitycrest, has made an analysis (republished in Inc42) - using Venture Intelligence data - of the "new normal" in terms of the time, money and number of pre Series A rounds required to get to that milestone. Extracts:



I don’t know if we are exactly in the mode of how things are in 2012-13 but it does seem that 2014-15 was an aberration and the direction of the data points gives us some lessons to draw from. So what can we learn?
1. You need to be doubly sure about the idea you are pursuing and the fundability of the team. Just the first seed round does not mean a lot in terms of the success of the business. Also, you probably need something north of INR 4 crores to get to Series A regardless of the market, so be looking out to raise the second seed if your first raise was modest.  
2. In case of an angel round, one needs to ensure that the lead investor is truly committed and understands the company’s business, has the ability to rally folks to fund a second time prior to Series A.  
3. Founders need to invest time and energy keeping all investors on board with the Company’s progress all along, else its hard to re-engage when the time comes for a second dip.  
4. Frugality is a trait that needs to be in the DNA of the company.  Need to spend money in drip fashion until signs of product-market fit are getting abundantly clear. Over-hiring is probably not the best idea at the seed stage.
Related Post: The Indian Venture Capital Funnel: Darwinism at Work

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Can ThyroCare Outdo Dr. LalPath Labs' IPO?

"Dr. Lal PathLabs IPO subscribed 33.41 times"

"Dr Lal PathLabs zooms 50% on debut"

Will the latest Private Equity-backed diagnostic chain to go public - Thyrocare Technologies - also enjoy similar headlines to Dr. LalPath when it completes it IPO - opening this week - and subsequently lists? Venture Intelligence maps the financial performance, investor returns and the valuation growth of Thyrocare (and benchmarks it to its peer that went public in Dec-15).



Check out Venture Intelligence's analysis of Dr. Lal Path Labs IPO.

Interested in seeing transaction level data for PE/VC Investors in Thyrocare? Take a trial to Venture Intelligence Deal Databases with tons of information on transactions, valuations and financials on private companies.

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Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 23, 2016

How Mohandas Pai & Ratan Tata are shaking up the Angel Investments Landscape

While Venture Capital investments* have been steadily falling from the peak registered in Aug-2015, investments by Angel Networks and Super Angels have continued to tick up driven by increasing activity of new entrants like former Infosys CFO Mohandas Pai & former Tata Group Chairman Ratan Tata. (Even the minor slowdown in the last couple of months by the professional angels, has been compensated for by new angel investors – typically working professionals and Entrepreneur CEOs making their first 1-3 investments – stepping up their activity.) 
(*Institutional Investments of <$20 M in Early & Growth Stage Companies)


Venture Intelligence dug into its angel investments database to study activity across the last 24 months (across 300+ deals) to identify the list of most active investors. Mohandas Pai – who invests both directly as well as via Aarin Capital, his shared Family Office with the Manipal Group’s Ranjan Pai – topped the list with as many as 31 investments - overtaking India’s oldest angel network – Indian Angel Network – which reported 30 investments in India-based companies during the period. Google India head Rajan Anandan (27 deals); Shaadi.com founder Anupam Mittal (22); Ratan Tata and Mumbai Angels (20 each) completed the top 6.


Who’s Stepping Up and Who’s Slowing Down


Seasoned entrepreneurs and executives who have stepped back from active management roles – including Ratan Tata, Mohandas Pai, the Infosys Co-founders like Nandan Nilekani and Kris Gopalakrishnan and recently exited Internet entrepreneurs like Phanindra Sama (redBus) and Raghunandan G (TaxiforSure) – are stepping up. Entrepreneurs who are actively managing their companies – Kunal Bahl and Rohit Bansal of Snapdeal, Sachin Bansal and Binny Bansal of Flipkart and Zishaan Hayath of Toppr – have slowed down from the frenetic pace they set in early 2015.


(Click to View Large Version)

Sector Focus



Among the most active investors, Internet industry veterans like Rajan Anandan and Anupam Mittal have chosen to focus on sectors they know best: Internet & Mobile, while the senior industry leaders like Ratan Tata and Mohandas Pai have invested across sectors including Education, Healthcare and Media.


Catch the ET Now Startup Central Coverage Here


Related Posts:


Tiger Global Vs Ratan Tata: Who Will Indian VCs Follow?

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

April 21, 2016

What explains microfinance firm Equitas' 23% gain on Listing Day?

Chennai-based Equitas Holdings, which is focused on providing microfinance and other financial services to bottom-of-the pyramid customers, closed its first day as a public company at INR 135.25, a gain of 23% over its IPO price of INR 110 per share. The company was 93% owned by PE/VC and Impact Investors prior to its IPO.


You can receive such updates via the Venture Intelligence Deal Digest Weekly Newsletter which delivers all the funding action of the week to your inbox. FREE!  Subscribe.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 20, 2016

Are Indian Unicorns Taking the Media for a Ride?

Mint has listed (on its front page) various fancy "GMV" goals totted out by CEOs of Indian E-Commerce Unicorns - at various points to various media outlets - but have been "missed by big margins". Extract:
Payments start-up Paytm launched its e-commerce business only in 2014, years after Flipkart and Snapdeal. But that didn’t stop the company from spelling out growth targets that would put its rivals to shame.
Alibaba-backed Paytm said in an April 2015 interview with Mint that it will generate annualized GMV of more than $4 billion by December 2015. In an interview this February with the Hindu BusinessLine newspaper, Paytm CEO Vijay Shekhar Sharma said the company was clocking GMV of $3 billion, which means it missed its sales target. No sweat. Paytm has set an even more ambitious target of hitting $10 billion in GMV by this December. 
..."If these goals are anything to go by, it would seem as if accountability isn’t high on the list of priorities at many e-commerce firms. Or perhaps the statements chronicled..simply comprise a low-risk, free-of-cost public relations strategy. If that’s the case, rose-coloured projections from start-ups are unlikely to stop any time soon.," 
Ouch, Ouch and Ouch!!

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Did Culture Clash Send Punit Soni B2SV (Back to Silicon Valley)?

Even as the question of whether Flipkart can provide profitable exits to its investors remains a multi billion dollar one, the firm has started to see high profile exits of a different kind: that of its top executives that it had attracted through acquisitions (especially Mukesh Bansal of Myntra) and from Silicon Valley.

The recent exit of Flipkart Chief Product Officer Punit Soni (who had joined it from Google) has received a lot of coverage in the media - including ET Now's interview with Soni on why (a polite techie sounding "There are a couple of areas that I'm interested in working on that are not orthogonal to Flipkart's interest") and what next for him (he's headed back to the US to work on a new venture). According to recruiters and others interviewed by Mint, "cultural differences" (between start-ups in Bangalore and Silicon Valley) is the key reason for the disenchantment of the Valley Hires. Extract:
...“People from Silicon Valley companies are used to working in places where there’s some sort of democratization of power and where there are systems and processes,” said a recruiter who works with top Indian start-ups. “In many Indian start-ups, entrepreneurs still like to wield a lot of control, and instead of controls and processes, you have chaos. There’s obviously a cultural mismatch. What is needed is management of expectations from both sides, transparency about what they are getting into and patience. Unfortunately, patience is not something you can afford when you’re expected to show 2-3x (times) growth.”
...“Often, founders have expectations that are impossible to achieve. At the same time, they are unwilling to give you any kind of meaningful freedom and control. There are systematic issues and operational issues at Indian start-ups that have been brewing for the past several years. Hiring new talent cannot change things overnight,” a Silicon Valley hire said.
On the other hand, some Indian entrepreneurs said that executives hired from the Valley failed to act fast enough and adapt to changing needs of start-ups. “The speed of the consumer Internet industry requires the businesses to change and adapt very fast. It does not allow people to get the learning time,” the entrepreneur said.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Kishore Biyani's "It's Not Very Important to be Online" - Practical Wisdom or Famous Last Words?

The founder of the retailing focused Future Group has declared e-commerce as an optional area in an interview to Mint:
“I have been a very good student of e-commerce business,” Biyani said in an interview on 12 April. “I have been watching it by doing it myself with Futurebazaar(.com) and by meeting a lot of people who have been in this business. I have met everybody in this business. I have experimented with exclusive tie-ups with particular e-tailers and have also worked with the father of multi-channel retail (Love Goel, chairman of global investment firm GVG Capital Group) to understand global trends,” he said. He explained that this was done as a part of six-month immersion programme last year, and it led to the realization that “it’s not very important to be online”.

Biyani has offered more arguments (on why e-commerce doesn't work) in a Forbes India interview (emphasis mine):

My cost of doing business is 12-18 percent of sales. In online, it is 45-50 percent of sales. Sellers’ commission is 15 percent when you sell through a marketplace. Delivery cost is 11-13 percent. The rest is the cost of managing the business. Even the cost of creating and running a website (all those top dollar techie salaries) is 8 percent. Sellers will eventually sell what [product] has margin. To do business legally online is not easy unless you manufacture yourself or have private labels.
We are not able to sell a lot of our brands online due to the lack of margins. For example, we have a fantastic electronics brand in Koryo that sells about Rs 200 crore a year but we can’t sell it online as the electronics category has low margins. And if we at Future Group can’t get margins, how can anyone get them is beyond my understanding. I expect the online business in a lot of categories to reduce.

Does all this feel like Practical Wisdom (borne from years of retail experience "in the Indian context") or Famous Last Words like the following:

"I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year."
Editor of Prentice Hall business books, 1957

"There is no reason anyone would want a computer in their home."
– Ken Olsen (Founder of Digital Equipment Corp), 1977

"I think there is a world market for maybe five computers."
– Thomas Watson, president of IBM, 1943

Given that Future Group has just purchased online furniture store FabFurnish.com (and said that it would be rolling its existing home furnishing brands into FabFurnish), something doen'e seem to be adding up.

Have a view? Chime in on LinkedIn.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

April 18, 2016

How Much Should You Diss Competition?

From the CB Insights newsletter of April 13, 2016:


From the CB Insights newsletter of April 15, 2016:

While we can't help but smile at CB's pugnacity, at Venture Intelligence, our culture has been to publish quarterly trend reports as as early as possible (to satisfy our demanding media friends) but also with as much accuracy and worthwhile details as possible. 

Related Reading: 



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Private Equity investments tick up 24% to $3.6 Billion in Q1’16

Quarter sees 12 Mega Deals ($100-M or more) across E-Comm; Financial Services; Healthcare & Infra
Private Equity firms invested about $3,620 million across 144 deals during the quarter ended March 2016, according to early data from the Venture Intelligence Private Equity Deals database, a research service focused on private company financials, transactions and their valuations. The investment amount was 24% higher than that invested in the same period last year ($2,922 million across 191 transactions) and 9% higher than the immediate previous quarter ($3,326 million across 152 transactions). Note: All figures in this note are exclusive of PE investments in Real Estate.
There were as many as 12 PE investments worth $100 million or more during Q1’16 compared to seven such transactions in the same period last year and ten during the immediate previous quarter, the Venture Intelligence analysis showed. The largest investment during Q1’16 was the estimated $350 million (INR 2,345 Cr) buyout of the commercial lending business of GE Capital in India by Aion Capital Partners in association with former GE Capital executives Pramod Bhasin and Anil Chawla. This was followed by Canada-based Fairfax's $321 million (INR 2,149 Cr) acquisition of the 33% stake held by the GVK Group in Bangalore International Airport.
Another Canada-based entity, Ontario Teachers Pension Plan, led a $200 million (INR 1,368 Cr) funding round for Snapdeal.com, which also facilitated an exit for some existing investors in the e-commerce firm. The next three largest transactions were also targeted at the online services/e-commerce sector: $150 million each for e-grocer BigBasket.com and payments processor Billdesk and a $145 million investment in auto classifieds firm CarTrade.
IT & ITES companies accounted for 34% of the value pie (attracting $1,222 million across 82 deals) during Q1’16, followed by BFSI (Banking, Financial Services and Insurance) companies at 26% (attracting $955 million across 12 deals). Led by the Abraaj Group’s $140 million buyout of Hyderabad-based Care Hospitals, Healthcare & Life Sciences companies (which attracted a total of $342 million across nine transactions) accounted for 9% of the investment pie.
Late Stage companies (including mature companies like Bangalore Airport, Snapdeal and Janalakshmi Financial) attracted 23 investments and accounted for 37% of the pie in terms of value during the period. Buyouts, led by the GE Capital and Care Hospitals transactions, accounted for as much as 24% of the PE investment pie (across 9 transactions) during Q1’16. Listed company investments (“PIPE” deals) accounted for 7% of the pie in value terms.  The 9 listed companies that attracted PE investments during the period was topped by the life insurance focused Max Financial Services (INR 950 crore or about $140 million from KKR) followed by retail focused Future Consumer Enterprise (about $45 million or INR 302 Cr from Black River).
The Venture Capital segment (defined as investments of up to $20 million in companies less than 10 years old) accounted for 85 of the PE transactions or 59% of volume pie during Q1’16 (7% by value). The VC investments of Q1’16 were dominated by follow-on rounds in companies like B2B group buying service for Power2SME ($20 million round led by Infosys co-founder Nandan Nilekani), food ordering service FreshMenu ($17 million from Zodius Capital and Lightspeed Ventures) and B2B marketplace firm cross-border enterprise software firm iCertis ($15 million round led by Eight Roads Ventures).
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

April 15, 2016

Equitas IPO: Payback Time for Impact Investors

Business Standard has an article on returns made by PE/VC investors in Equitas Holdings' IPO using data from the Venture Intelligence Private Equity Deals Database.



Incidentally, Aavishkaar Goodwell made INR 80 Cr or 13 times its INR 6 Cr investment in Mar-2008 and more than the size of its 2007-vintage fund (Aavishkaar Goodwell Fund I which had a corpus of $17 M or INR 76 Cr at that time).

Contact Us for a spin of our Social VC Investments Deals Database with valuations, financials and transaction multiples.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 12, 2016

PE Investors offload shares worth $2.5 B in Q1'16 - Up 129% YoY

Private Equity exits in India for Q1 2016 amounted to $2.5 billion (including value of stock swap transactions) an increase of 129% compared to $1.94 billion in the Q1 2015, according to latest Venture Intelligence Private Equity Exits Report. Of the total exit value in Q1’16, $2 billion represented complete exits; the remainder being partial ones.
Highlights

  • 7 exits of over $100 million in value account for 82.28% of the value pie
  • KKR sells its stake in Alliance Tire Group for $1.05 Billion to Yokohama Rubber Co
  • Strategic Sale exits at $1.3 Billion account for 37% of total exits followed by Public Market Sale and Secondary sale with 29% each

The largest PE exit announced (in value terms) during the year was the stake sale worth $1.05 billion of Alliance Tire Group by KKR to Yokohama Rubber Co. KKR realized approx. 2.8x return on its three year old investment.

The next largest was the exit by Advent International from Care Hospitals via a sale to Abraaj Group for a reported $231 million. This was followed by Arpwood Partners’ stake sale in Senvion when it got listed in Frankfurt stock exchange on Mar 23, 2016 fetching a 2x return, within a year of the investment. In the IT space investors in BillDesk and Commonfloor registered exits in deals worth $100 M+.




Exits by Profitability

In Q1 2016, PE investors fetched 32 profitable exits compared to 52 profitable exits in the previous quarter. Of these, six exits fetched 3x or higher returns (compared to 13 such deals in Q1 2015).

SAIF Partners registered a 22x return in a buyback deal in JustDial, while Sequoia Capital India also recorded a 4.6x in a buyback deal in JustDial. Rakesh Jhunjhunwala's Rare Enterprises registered a 13x exit when it sold Concordia Biotech to Quadria India.

Exit Via IPOs

PE Backed IPOs during Q1’16 included those of cancer care hospital chain HealthCare Global, multi-specialty hospital operator  Narayana Hrudayalaya, security software firm Quick Heal Technologies and staffing services firm Teamlease Services.



The full report has been mailed to Venture Intelligence subscribers. Please Contact Us for a trial.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

April 11, 2016

The 10 Worst VC Board Members

From a Tweet by Bessemer Ventures:


Creative Reminiscent of Bessemer's famous Anti-Portfolio.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

April 07, 2016

Indian Startup Ecosystem attacked by "Integrity Cancer": Kashyap Deorah

Kashyap Deorah, author of "The Golden Tap: The Inside Story of Hyper-Funded Indian Startups" and the former President of the Future Group's e-commerce venture Futurebazaar.com, has a LinkedIn post describing various examples of ethically challenged behaviour at Indian startups.

Extracts:
Senior management of a startup create new companies that provide services to their hyper-funded startup. The startup loses money through its nose while the service provider makes great margins. The service provider compensates its shareholders through dividends and individuals through fees. In similar news, relatives of the founder of a large e-commerce company become sellers on the platform, get tipped off about when the company will sell at negative gross margins, and sell to the e-commerce company at a higher price only to buy back in bulk at a lower price.
...A VC firm struggling to return money to its investors after seven to eight years finds a portfolio company in a space that is tipped to be on the radar of global investors due to a hyper-funded Chinese equivalent. VC invests $5 million at a certain valuation. Startup issues a press release announcing twice the investment amount at a 50 percent higher valuation. Entrepreneur loves it because competitors get scared off due to the stated valuation and fund-raise. VC loves it because they are able to demonstrate greater multiples on mark-to-market as they look to raise a new fund. Both work together to tweak the story to the liking of the global investor and pitch their startup as the top choice. In one such occasion, the reporter involved is a relative of the entrepreneur.
...An influential angel investor looking to start a new company in a certain market space goes to an existing startup operating in that space. He poses as investor, gets all details including alternate company names they looked at. He buys the domain for one of those names, starts a competing business and raises seed money the size of a Series A. A similar story plays out with a VC. A VC firm with a term sheet out to a startup continues to take a close look at competitors without revealing that they have a term sheet out, even when asked about conflicts. A deal is announced a few weeks later. VC does not reply to emails of competitors who got the short end of the stick. Non-disclosure agreements are no longer used in the country because enforceability is a joke. 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Manish Sabharwal @ Venture Intelligence APEX'16 PE-VC Summit


Manish Sabharwal, Co-Founder of leading staffing services company Teamlease, that pulled off a successful IPO in the choppy environment of early 2016, weighed in with typical flourish on various issues as part of the inaugural panel at the Venture Intelligence APEX'16 PE-VC Summit  (Bangalore; March 9). Some highlights:



"India's Brand is Warm - Not Hot or Cold"

India's brand is that 'We won't be Hot or Cold; we will be consistently Warm'. We will be 'between 5 and 8' - in terms of growth rates. If we are growing at 5%, don't worry, we'll soon go to 8%. If we are growing at 8%, then we'll pretty soon we will go down to 5%. I don't think we'll ever grow at 13%. Which is why, for us entrepreneurs, the current economic weather is not so relevant.

Click Here for the related video








Lessons from China - Decentralization and Strong Leadership 

Decentralization and Strong Leadership are more important lessons to take from China than the virtues of single party rule and the ability take away land without asking. China's genius was not in some Ayotollah sitting in Beijing issuing Fatwas; it was in having mayors competing for investment. The important development of the last 18 months in India is that we are handing power to the States - which is why things like Labor Reforms are getting done. And as we hand over power even further to City leadership, things will get even better.


Impact of Policy Changes

We are praying to One God - Jobs - and if we get that right, the rest will fall into place. We overestimate what policy can do in the short run, but underestimate what it can do in the long run. For the first time, we have a government that has a vision and plan to address all the areas that relate to jobs and productivity: Manufacturing; Urbanization; Labor Law Reforms ("where we have seen more action in the last 1 year than in the previous 20 years"); Ease of Doing Business; etc. We will see the fruits of changes in these inter-related areas over the next five years.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

The Venture Intelligence APEX Private Equity - Venture Capital Summit is  an  annual one stop update point for the latest trends affecting the Investor-Entrepreneur Ecosystem and to enjoy great networking opportunities.

April 04, 2016

B2B Services, EdTech and IT Product Cos witness return of interest even as overall Venture Capital investments dip 32% in Jan-Mar'16

Venture Capital firms invested $242 million over 85 deals in India during the three months ending Mar 2016, data from the Venture Intelligence VC Deals Database shows. The investment activity by volume during Q1’16 is 32% lower compared to the same period in 2015 (which had witnessed 125 investments worth $471 million). The activity level was also 13% lower to the immediate previous quarter (which had witnessed 98 deals worth $347 million).

Note: As VC type investments cap out at $20 million per round under Venture Intelligence definitions, follow on investments raised by companies like BigBasket, CarTrade, ShopClues, Byju’s Classes, etc. are not included in this report.

The larger Growth Stage investments in Q1’16 included the $20 million Series D investment in B2B Group Buying site Power2Sme led by Nandan Nilekani (along with existing investors Kalaari Capital, Accel India and Inventus Capital) and the $13 million third round investment in baby products e-commerce site Hopscotch led by Facebook Co-founder Eduardo Saverin. Among Early Stage investments, food tech company Freshmenu raised $17 million from Zodius Capital and Lightspeed Ventures while Just Buy Live, a B2B marketplace connecting retailers with consumer brands, raised $14.5 million from Alpha Capital and Aarin Capital.

Information Technology and IT-Enabled Services (IT & ITES) companies, at 69 deals worth $199 million, attracted 79% of the investments in volume terms (83% in value terms). Food & Beverages companies followed a distant second attracting 3 investments worth $11 million led by beer maker Bira 91 which raised $6 million from Sequoia Capital India and angel investors. Sequoia Capital also led a $4.75 million investment in another beverages company RAW Pressary along with Saama Capital and DSG Consumer Partners.


Even as investor interest in Consumer Internet & Mobile sectors like Food-Tech and Real Estate portals waned, Q1'16 saw the return of invest interest in sectors like B2B online services, Education and IT Products. Apart from Power2sme, other B2B services that raised capital during Q1'16 included Just Buy Live, KartRocket and SnapBizz. IT Product companies like Sedemac Mechatronics (mechanical engineering tech firm; $7.5 million led by Nandan Nilekani), Altizon Systems (IoT Startup, $4-M led by Wipro Ventures) and Aarav Unmanned Systems (drones for agri and industrial uses; $0.5 M from StartupXseed Ventures and others) and Ed tech start-ups Avagmah (B2B services in Higher Education; undisclosed amount from TechPro Ventures and Kris Gopalakrishnan), Mycity4kids (marketplace for after school activities; $3-M led by SIDBI Ventures) and FlipClass (Marketplace for tutors; $1-M from Blume Ventures and education publisher S Chand ) attracted capital during the period.

ET-Now's coverage of the quarterly trend:



 Comments? Join the Discussion on LinkedIn.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 30, 2016

Why, Despite Reporting Record Investment Figures, Private Equity in India Needs Structural Changes

Even though Private Equity investment figures in 2015 surpassed the previous high (of 2007), the expert panel at the Venture Intelligence APEX'16 PE-VC Summit felt the PE segment still faces a challenging environment and that "selectivity" will be keyword for such investments in the months ahead. Speakers on the panel included Pradyumna Nag, Director, Prequate (moderator); Arvind Malhan, Partner, New Silk Route; N.K.Dilip, Partner, Tatva Legal; Sunil Kolangara, Director, Ascent CapitalSrini Vudayagiri, Partner, Peepul Capital

"The days of playing the Valuation Arbitrage game - of investing in a private company and it taking public at a higher multiple and looking intelligent in the process - are gone. The only scope for such an arbitrage today is to spot a sector early enough," commented Sunil Kolangara, Director, Ascent Capital. "Passive investments are also a thing of the past - PE investors, including those who hold minority stakes, are much more hands on with their portfolio companies these days," he added.

Sunil Kolangara, Director, Ascent Capital

With executing exits continuing to be challenging and any slow down in the public markets affecting valuations in the PE market, fund managers are going to be very selective in making investments in the months ahead, Kolangara felt. Echoing the sentiment, Arvind Malhan, Partner, New Silk Route, said that "Selectivity, Specialization and Superior Returns" would be the key areas of focus for PE investors. He highlighted how various funds are choosing to specialize in segments like distressed assets (especially with many banks restructuring their non-performing assets), mezzanine funding, buyouts, etc.

View the full panel discussion on YouTube:



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

The Venture Intelligence APEX Private Equity - Venture Capital Summit is  an  annual one stop update point for the latest trends affecting the Investor-Entrepreneur Ecosystem and to enjoy great networking opportunities.

March 29, 2016

Tiger Global Vs Ratan Tata: Who Will Indian VCs Follow?

As Tiger Global and various international investors step on the brake at their investment vehicles, there is one class of investor - Family Offices - that is stepping on the accelerator.

Using data from the Venture Intelligence PE/VC Deals Database, we looked at VC deals (including Growth Capital investments of over $20 million in tech startups) over the last twelve months – in two distinct halves. The first half of the Indian fiscal year - April 2015 to September 2015 - things were quite rosy all around and all kinds of international investors - from Hedge Funds (with colorful names) to European & Russian Billionaires - pouring capital into Indian startups. With the next six months witnessing a cooling off in investment activity (at least when compared to the first half of 2015), Venture Intelligence dove into the data to find which class of investors braved ahead and which took their cues from the nervousness flowing in from Silicon Valley.

Investment activity of Hedge Funds and related investors (ie typically public markets focused)  – including key Flipkart backer Tiger Global (which made 5 investment in the latest 6 months vs 18 in the previous 6 months) - was down the most: as much as 67%. Hedge Funds which followed Tiger into the Indian start-up land - names like Steadview Capital, Falcon Edge Capital, etc. – went completely missing post October 2015. Corporate VCs – like Qualcomm Ventures (4 investments in the latest 6 months vs 9 in the previous 6 months), Nokia Growth Partner (0 vs 3), etc. – have also slowed down significantly (by 44%).

At the other end of the spectrum, the Family Office category has been up the most – as much as 38%. This segment of investors,  led by names such as Ratan Tata (12 vs 7), Ronnie Screwvala (6 vs 2) and various Infosys Co-Founders, who were already quite active in the first half, stepped on the accelerator pedal in the second half.

Interestingly, among traditional Venture Capital funds, India-dedicated funds - which have raised money to be deployed only in India, like Sequoia Capital India (16 deals vs 31) and Accel India (17 vs 27) - slowed down their investment activity (down 36%) more compared to Foreign VCs (down 22%).  Among foreign funds (which have a choice to deploy their capital in geographies other than India as well), Japanese Early Stage VCs like Beenos Partners (7 deals vs 5 deals) and M&A Partners (5 vs 4) stepped up their pace.


Angel Investment Networks and Super Angels as well as the Impact Investors / Social VC segments maintained about the same pace of the investments across both periods. In fact, the recent 6 months has witnessed the entry of several more independent angels - making their first set of investments as professional investors – into the Indian start-up ecosystem. The period has also witnessed Impact Investors leading rounds at online services and E-Commerce companies – for example, Aspada Investments led a $5 million round for entry level jobs marketplace Aasaanjobs with existing financial VCs in the company (IDG Ventures India and Inventus Capital) co-investing.

Looking Ahead

Will Hedge Funds and Family Offices continue swimming in opposite directions in the months ahead? And, who will the Financial VCs – who provide the bulk of the capital for Indian start-ups - follow: Tiger Global and Russian Billionaires or Ratan Tata and Nandan Nilekani?

Coverage of the Venture Intelligence "Changing Investor Mix" Study on ET-Now's Startup Central Show:


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Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 25, 2016

Write Downs to Down Rounds to IIT Buddies & the Cricket Club of India Bar - There are Many More Scenes Left in The Great Indian E-Commerce Drama

Frankie Brown of Investec has an interesting take on Indian E-Commerce in Economic Times. Extracts:
The funding slowdown has revealed as much about the Indian venture capital market as the companies they evaluate. It is a small world of IIT buddies and their gossiping, of egos and posturing, bluff and counter-bluff. Where the fearful see chaos, the wise see opportunity — the market is full of increasingly attractive deals.
...What concerns me is the over-reliance of the market on such a small number of investors. With traditional private equity reluctant to get involved, and offline players choosing to remain wilfully blind, Tiger, Naspers, Soft-Bank and Alibaba have run riot, waving magic wands and making princes and paupers of those they select and jettison. There remains a concern that in the world of “bigger is better,” inefficiencies are creeping into the market.
...Valuations are a matter of conjecture, but what is happening on the ground is indisputable. The seismic shift in consumer behaviour has not been witnessed anywhere in the world. Established players — whether banks, insurers, retailers — hold such a tiny portion of their respective markets relative to the rest of the world that the opportunity for new businesses underpinned by technology is so much larger. Per capita income is likely to double by 2025. There is no better place in the world for genuinely innovative entrepreneurs, and nowhere is the prize larger for the winners. The Indian dream is alive.
... The solution for the sector? Bravery. Bravery by investors to swim against the tide, to ask the tough questions, to think critically, not listen to their mates at the Cricket Club of India bar, but to block out the noise. Bravery by entrepreneurs to recognise that world-leading businesses take time to create, that bigger isn’t necessarily better, and to have faith in creative destruction.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 24, 2016

Is CaratLane over valued?

Economic Times has an article on e-jeweler CaratLane's as part of which it uses Venture Intelligence's data to check on the valuation of the company and its peers.

Easily the top-funded estore for jewellery, CaratLane has raised well over Rs 300 crore ($50 million) since 2011, predominantly from Tiger Global Management, which is invested in Indian top start-ups Flipkart and Ola. CaratLane's latest fund-raiser, announced in January 2015, was Rs 185 crore ($30 million) at a valuation of Rs 712 crore and a revenue multiple of nine times, according to data provided by investment tracking firm Venture Intelligence. Among the other top fund-raisers, Bengaluru-based BlueStone raised Rs 100 crore, last year at a valuation of nearly Rs 373 crore. 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 16, 2016

Top Desi VCs in Silicon Valley

Mint has extracted a list of 14 VCs of Indian origin in the US who made it to CB Insights' Top 100 VC.



There are 5 more desi names on the CB list (not sure which one Mint has excluded):

80 Samir Kaul Khosla Ventures

91 Satish Dharmaraj Redpoint Ventures
92 Venky Ganesan Menlo Ventures
93 Ravi Mhatre Lightspeed Venture Partners

97 Jani.Amish Amish Jani FirstMark Capital

While Vinod Khosla (probably the best known VC of Indian origin of all time) himself is not on the CB list, two folks from Khosla Ventures - a fund he founded and leads - are.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 14, 2016

More Free Advice for TinyOwl: Now, on Areas Where It Should Have Kept its Eyes Open Wider

There's more free advice in the air for TinyOwl. Business Standard has an article listing the "6 Mistakes" of the troubled food delivery start-up TinyOwl.



The six mistakes, according to BS,  included "firing 300 employees after over-hiring (in Sep15)"; making more lay-off close to Diwali; in-effective pivots; a (costly) CTO hire and closing the Homemade division (that was doing relatively well).

The BS article has led to TinyOwl trending again on Twitter - including on its non-auspicious choice of name, VC bashing and even a NDA vs. UPA angle.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 11, 2016

ET NOW's coverage of Venture Intelligence APEX'16 PE/VC Summit

Part 2 (snapshots from the panel on making Startup Ecosystem sustainable):



Speakers on the panel - moderated  by Chandra Srikanth, Chief Correspondent & Anchor, ET Now - included in this segment:

K. Ganesh, Co-Founder, GrowthStory

Ben Mathias, MD & India Head, Vertex Ventures

Shailesh Ghorpade, Managing Partner & CIO, Exfinity Ventures

Aroon Raman, Managing Director, Telos Investments  

Avinash Luthria, Principal, responsAbility

Suhail Nathani, Partner, Economic Laws Practice

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 10, 2016

ET-NOW's coverage of Venture Intelligence APEX'16 PE/VC Summit

Part 1 (snapshots from the panel on making Startup Ecosystem sustainable):


Speakers on the panel included in this segment:

K. Ganesh, Co-Founder, GrowthStory
Ben Mathias, MD & India Head, Vertex Ventures
Shailesh Ghorpade, Managing Partner & CIO, Exfinity Ventures
Aroon Raman, Managing Director, Telos Investments  

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

March 02, 2016

"Flipkart's valuation will dive all the way down to $3.2 B": Kashyap Deorah

Kashyap Deorah, author of "The Golden Tap: The Inside Story of Hyper-Funded Indian Startups" and the former President of the Future Group's aborted e-commerce venture Futurebazaar.com, seems to be having a good time amidst Flipkart's key investor Tiger Global buying into rival Amazon and the recent write down of its valuation by another investor, Morgan Stanley.  Extracts from his latest column in Mint:
...this is the beginning of a slide that will continue until Flipkart’s valuation equals invested capital, currently $3.2 billion. 
...With 200-250% revenue growth and 20-40% operating losses, even at a reduced $11 billion, a multiple of 3-5x seems high.
...Now let us look at the funding scenario. Tiger Global Management bought over $1 billion of Amazon shares a quarter ago. Since June 2015, Amazon has grown by 50% in market capitalization, while JD.com and now Flipkart are down 30%. Amazon has the luxury of free cash flow, as is the outcome of a true e-commerce business, growing revenues while breaking even operationally. This free cash flow can keep funding Amazon’s Indian subsidiary for several more billions. Meanwhile, Flipkart needs its investors to dig deep in times of illiquidity so they can continue losing money per transaction and keep on the path of fake growth prescribed under their parents’ ambitions of e-commerce imperialism. If anything, JD.com’s Nasdaq IPO in the summer of 2014 makes Flipkart overdue by over a year now. Forgive me for suggesting that if you believe the hyper-funding party is still on, you are hung-over and the couch you are on belongs to the stranger who just left for work.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 22, 2016

VC Slowdown; Quick Heal & Teamlease IPOs; and Govt as Limited Partner: Latest ET Now - Venture Intelligence Funding Meter




Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 19, 2016

Gyan Giving on Startup Survival

Anand Sanwal of CB Insights has a tongue-in-cheek template for (US-based) VCs that are out to advise startups on the "importance of conserving cash" and "focusing on turning profitable". Extract:
Part 2 – Package up basic rules of business and sound smart
  • Cash is king – remind people that having money in the bank is important cuz great founders regularly forget this. Talk about living to fight another day.
  • Get to cash flow positive – implore founders to find a way to get to cash flow positive. Pretend that bringing in more cash than you spend is a concept you just invented. 
  • Make hard decisions – tell founders that they may have to make hard decisions about their team and laying off folks. Say things like “you may have to cut some muscle as well as fat” to show that you mean business.
  • Have reasonable valuation expectations – ensure that people know we’re in a brave new world and that valuations have come down and that founders will have to reset their expectations.
  • Talk to investors – whether it is existing investors or new ones, tell founders to start talking to them ASAP and quickly identify who “has their back.”
Part 3 – End positive 
Close by saying things like the below:
  • What doesn’t kill you makes you stronger
  • Taking the above actions will make you a better company
  • Great companies are founded in difficult times 
 Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Printo's Travails With Tranches

Just a day after entrepreneur Sumanth Raghavendra started listing out "Good VCs and Angels in India" on Twitter, Mint has published a 2.5 page "tell all" by Printo founder Manish Sharma on the issues he faced with his VC investor.

The main focus of the problem seems to hinge around "tranching" - ie , the investor staggering the transfer of the investment amount based on performance milestones - and how circumstances changed (owing to the 2008 global market meltdown) by the time the next installment came due. With markets looking shaky almost exactly eight years since, the Printo tale seems a timely one for entrepreneurs agreeing to tranches in their funding agreements.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 18, 2016

Mint Article on Impact Investments

Mint has a column on Impact Investments leveraging Venture Intelligence data.


Highlights from the Venture Intelligence Social VC Report for 2015 can be viewed here.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 16, 2016

EDF to back funds from Kitven, Exfinity, Forum Synergies, Endiya

Minister for Communications & IT Mr. Ravi Shankar Prasad handing over Letter to V. Balakrishnan and Chinnu Senthilkumar of Exfinity Ventures

Mr. Ravi Shankar Prasad, Union Minister of Communications & IT, handed over letter of commitments (of between INR 10 crore and INR 40 crore) from the INR 2,200 Crore Electronics Development Fund (EDF), a Fund-of-Funds sponsored by the Department of Electronics and Information Technology with CanBank Venture Capital Fund as its Investment Manager, to funds managed Karnataka Semiconductor Venture Capital Fund (managed by KITVEN), Exfinity Venture Partners, Forum Synergies and Endiya Partners.

Mr. Prasad launched the EDF web site and provided the Inaugural Address at the event that Venture Intelligence helped organize. Other dignitaries who spoke at the EDF launch event included Rajiv Bansal, Joint Secretary, DeitY; Dr. Aruna Sharma, Secretary, DeitY; Mr. Rakesh Sharma, MD & CEO, Canara Bank and Mr. S.Thiruvadi, MD, Canbank Venture Capital Fund. Mr. Sridhar Venkiteswaran, Executive Director of Avalon Consulting, compered the event.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 06, 2016

IoT Hotting Up; Startup Consolidation & More: ET-NOW VI Funding Meter for Feb 1-5, 2016



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 04, 2016

Venture Intelligence Impact Investments in 2015 Report Covered in ET-Now

Click the following image to view the segment video:


Click the following image to view details from the report:



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

February 02, 2016

Cross-Border Deals to the Fore; B2B & Fundamental Tech Cos Attract Funding; Latest Edition of ET-NOW - Venture Intelligence Funding Meter




Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

January 28, 2016

Morgan Stanley Tops League Table for Financial Advisor to Private Equity Transactions in 2015

PwC tops table inclusive of due diligence, other services; Unitus Capital tops by deal volume 

Morgan Stanley claimed the top position in the Venture Intelligence League Table for Transaction Advisor (Private Equity deals) for calendar 2015 acting as financial advisor to two qualifying PE investments worth $1,320 million during the year. The transactions advised by Morgan Stanley were the $1,150 million buyout of Senvion by Centerbridge Partners (from wind turbine maker Suzlon Energy) and the $170 million investments by Blackstone in IT Services firm IBS Software.  Arpwood Capital, which also advised the Senvion - Centerbridge Partners deal, stood next.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

Inclusive of its roles in due diligence and related advisory activities, PwC topped the league table for transaction advisor for PE deals in 2015 advising deals with a value tag of $2,300 million (across a total of 35 deals). PwC advised deals included the $12.7 million investment by Ascent Capital into Radiant Cash Management Services and the $3 million investment by Kalaari Capital, Yournest and others into financial services portal Bestdealfinance.com.

Unitus Capital topped the tables in terms of deal volume, advising a total of 18 deals ($17.2 million) during the year. Unitus Capital advised deals included the $5 million investment by Exfinity Fund; Unitus Impact’s investment in online B2B marketplace Shotang; and the $2 million investment by FMO into solar energy solution provider Orb Energy.

New entrants into the Venture Intelligence league table for transaction advisor to Private Equity during 2015 included Arpwood Capital, Nucleus Partners, IndigoEdge, Candle Partners, Bharat Banka, Four-S Services, Novistra Capital and Khetal Advisors.

The full league tables can be viewed online at http://www.ventureintelligence.com/leagues.php

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.