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June 29, 2017

Paytm Karo! VC Exits harvest over $1-B in first half of 2017

2017 is on track to becoming the best year ever for Venture Capital exits in India. Thanks to mega cash exits worth $650 million from One 97 Communications (the parent company of mobile wallet service Paytm), VC investors have harvested over $1 billion via exits during the first six months of the year, data from the Venture Intelligence VC Deals Database shows.

The VC exit figures for H1'17 is comparable to the record highs in the first half of 2015 (which had witnessed large exits from companies like FreeCharge and TaxiForSure). Unlike the mega exits of 2015, which involved large stock swap components, the larger exits of 2017 are actual cash realizations.

SAIF Partners and Saama Capital, who first invested in One 97 / Paytm a decade ago, sold their stakes to the company's new investors (SoftBank and Alibaba Group respectively) to realize returns of 26 times and 75 times their invested capital respectively, the Venture Intelligence analysis shows. Matrix Partners India notched up two successful exits in the period - selling its stakes in online gaming firm (for 22x) and payments firm Itz Cash (for 3.19x).

The better VC exits of H1'17 typically happened through either the Strategic Sale or Secondary Sale (ie, acquisition by a new financial investor) routes. A positive feature of the exits has been the fact that the buyers have come from across the world - including China (Alibaba and Bytedance which acquired Franklin Templeton PE unit's stake in regional language news service, Newshunt); Japan (SoftBank); Europe (including London, UK-headquartered Dentsu Aegis Network which acquired digital media company SVG Media and Paris, France-based Ingenico which acquired payments firm TechProcess), US (Ebix which acquired the stakes of Matrix Partners India, Intel Capital and Lightspeed Ventures in ItzCash) and Canada (PE firm Clairvest which acquired Matrix Partners stake in

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In another Secondary Sale transaction, European Impact/Social VC investors Incofin and ResponsAbility jointly invested $20 million (approximately INR 130 crore) in Delhi-based agri-logistics and financing group Sohan Lal Commodity Management facilitating an exit for Everstone Capital, Mayfield, Nexus Ventures and the ICICI Bank-managed Emerging India Fund.

In the sole VC exit via the IPO route, investors in optical networking equipment firm Tejas Networks, realized between 2.3 times to 4.5 times their invested capital, after holding on to shares for between 7 and 15 years.

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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.