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December 28, 2015

Is there Any Downside to Active Entrepreneurs Making Angel Investments?


In an article titled "The Curious Case of Entrepreneur-Angels", Santosh Sreedhar of Avalon Consulting and Neeraj Gupta of Excubator explore whether the founders Flipkart, SnapDeal, CommonFloor, etc. should be turning Angel Investors "even as their core venture has still not turned around profits". Extracts:

However, there are a few who believe the trend should not be encouraged as it distracts the entrepreneur from the core business, which in many cases is still not profitable. They feel that even though some of these entrepreneurs have “made money”, many are still to prove their capability to “build businesses”. As one leading VC put it - “Its not a business if its not profitable”. They argue that such investments are bound to distract the entrepreneurs from focusing on turning their core business profitable.
Putting a clause in the term sheets restricting entrepreneur investments in outside ventures is not a norm in India or elsewhere. However, disclosure rules require entrepreneurs to keep the Board informed if such investments are being made. Entrepreneur investments in conflicting opportunities are not encouraged, but those in synergistic opportunities are often encouraged by the Board.
This is a topic that I've discussed with some entrepreneur-angels as well. My conclusion:  Especially in the Internet & Mobile sector, where change happens very rapidly, the angels who can spot opportunities and also add the most value (at least, tactics wise) are probably those that have "been there & done that most recently" - ie the Entrepreneur -Angels.

I was talking to couple of such recently. One of them said he is only investing in those ventures that address a gap in the market that he, through his existing and previous venture, has clearly spotted a need for. The other entrepreneur said, once he makes the investment - unless the founders of the investee companies scream for help - he does not bother to track them closely. In both cases, they averred the investments did not distract them from their primary venture. And, given how savvy most of the new generation entrepreneurs are (including wrt investor relations), I did not find any reason not to take them at their word.

From a VC perspective too, this trend should be good news. A couple of years ago, among their main problems was the lack of a pipeline of "well cooked" startups - for them to cut $1-M+ cheques for. And the perennial problem of lack of exit opportunities. Given how busy the bigger startups have been in acquiring their smaller VC-backed peers, the Entrepreneur-Angels are solving both of these problems for VC investors!

Any Comments? Join the discussion on LinkedIn here

Venture Intelligence is the leading 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.

December 23, 2015

What went wrong at Avigo Capital? An Analysis of the Firm's Portfolio




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Dr. Lal Pathlabs Signs off a Good Year for Private Equity-Backed IPOs


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December 17, 2015

Why Does India Celebrate Rahul Yadav?


First a quick extract from Sumanth's post:

Despite all the buzz around India having arrived as a hot startup destination, there have been precious few aspirational startup exemplars since the halcyon days of  Sabeer Bhatia and Narayan Murthy. A false dawn if ever there was one…
Equally tragic is the fact that folks who could potentially be startup heroes—a Sachin Bansal or a Vijay Shekhar Sharma—seem to be idols with feet of clay…either
backing the likes of Rahul Yadav with angel investment to continue this cringe-worthy charade of faux startup-ism or needing him to fill seats at their own events.
How I wish the media highlighted the story of a Santosh Panda who has diligently persevered to build Explara over several years with almost zero funding…or of a Nikhil Pahwa who selflessly fights for a public good like net neutrality at a great personal cost…or a Girish Mathrubootham who is pioneering a seminal “value arbitrage”  competitive differentiator that other Indian SaaS startups would do well to emulate.

Clearly, Sumanth hasn't penned this stuff to win new friends! But is he right in saying that Indians are obsessed with funding - so much so that it "is more akin to a full-on, shameless public orgy"?

As the first in the country to create a business around funding announcements, we at Venture Intelligence are admittedly somewhat biased on the topic. (Venture Intelligence tracks private company financials, transactions - Private Equity/Venture Capital, M&A, etc. - and their valuations for our bread-and-butter. And getting paid by investors to do this - since 2002.) Having said that, hasn't Girish Mathrubootham - who Sumanth includes among the list of good guys - by raising as much as $94 million for Freshdesk, dealt with venture funding for what it is: a financing tool (nothing more, nothing less) that's available to be used by entrepreneurs if they so choose? Despite having been cut from the Zoho cloth, Girish has been pragmatic in not making "no VC funding or exit for me" into, well, an obsession.

For entrepreneurs who do raise funding, it makes tremendous sense to tomtom the event. As Sumanth has observed, the media loves funding stories. In fact, you just can't pay the media (officially at least) to talk about your great product - and consequently miss the opportunity to reach out to their audiences  - than when it's coupled with a funding announcement.

So, why does the media obsess about funding?

Because funding provides a "chaapa" (ie, a seal or a way to "Cover Your Ass") to talk about a startup - since someone has actually cut them a cheque. Especially with Early Stage companies, where financial data does not provide much to go with, the funding "chaapa" counts for much among journalists, even the less lazy variety. Media visibility can also be a double edged sword: when things go south, the media will be quick to pull down the very startups they've celebrated the most. If the funding tap does run dry, going by the experience of 2000-01, we can bet that all the cover stories, special pages and awards events focused on startups, will get pulled. So, it makes sense for startups to bask in all the funding driven free PR that they can get, while the media's obsession is still on.

Regardless of the disagreement on the obsession factor, I loved Sumanth's piece for calling, ahem, "a spade a spade".  It is such independent thinking and fearless commentary by folks like Sumanth, Mahesh Murthy, Alok Kejriwal, Anand Lunia, Sridhar Vembu and Haresh Chawla (an angel investor in Housing.com who's penned a very different sounding piece on Rahul Yadav) which makes tracking the startup ecosystem truly interesting.

Related Images:

April 2015 (Source: The Quint)


December 2015 (Source: Bizztor)



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December 15, 2015

Startup Failures of 2015


Techinasia has rounded up a list of 11 startups that gave up in 2015. The list includes

From Foodtech:

Dazo
Investors: Rajan Anandan of Google, Amit Agarwal of Amazon, Kunal Shah of FreeCharge and Founders of CommonFloor, TaxiForSure, and Yo China.

Spoonjoy
Investors: SAIF Partners; Sachin Bansal of Flipkart

From E-Commerce:

DoneByNone
Investors: Seedfund

From HR Tech:

TalentPad
Investors: Helion Ventures

From Hyperlocal:

Townrush
Investors: Lightspeed Ventures

From IoT:
Lumos

Interestingly, Yash Kotak, a co-founder of Lumos, has published a detailed article in YourStory listing "7 Reasons Why My IOT Startup Failed".

Venture Intelligence is the leading 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.

December 08, 2015

Private Equity Exits Via Public Markets on the Rise



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Private Equity Investments Down For The Fourth Straight Month


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December 03, 2015

Why do Bill Gurley & Jason Fried Hate Unicorns?

Silicon Valley VC and Benchmark Capital partner Bill Gurley has been calling a bubble for a couple of years now. Gurley explains why he is so concerned with bubbles in his latest interview to Technology Review magazine:
Great entrepreneurs are relatively disadvantaged in these markets where so much capital is available. In a market where capital is hard to come by, they can still raise money. In this market, they can raise a ton of money, but so can a lot of [less capable] competitors that wouldn’t be in business otherwise. 
...Imagine two companies. One is told, “I want you to get to $100 million in revenue and you have to be profitable when you get there.” The other is told, “I want you to get to $100 million in revenue and I don’t care if you lose $40 million getting there.” Which of those two exercises is harder, and by how much? I would argue it’s at least 10 times harder to do the first. Until you can prove that you can generate cash flow, you don’t have a sustainable business. No matter which of these unicorn boardrooms you walk into, everybody thinks it’s perfectly okay to burn tons of money
The fact that some Unicorns just refuse to die seems to have also pissed entrepreneur Jason Fried, Founder of proudly bootstrapped software firm 37Signals (a story much like India's Zoho). So much so that he has dusted up and re-released his 2009 vintage The Onion like Press Release titled "37signals valuation tops $100 Billion after bold VC investment". The deal terms (in case you - like me - do not remember the 2009 original)? 0.000000001% of the company in exchange for $1!

Extracts (emphasis mine):
In order to increase the value of the company, 37signals has decided to stop generating revenues. “When it comes to valuation, making money is a real obstacle. Our profitability has been a real drag on our valuation,” said Mr. Fried. “Once you have profits, it’s impossible to just make stuff up. That’s why we’re switching to a ‘freeconomics’ model. We’ll give away everything for free and let the market speculate about how much money we could make if we wanted to make money. That way, the sky’s the limit!” 
A $100 billion value for 37signals is “not outlandish,” says Aanandamayee Bhatnagar, a finance professor and valuation guru at Grenada State’s Schnook School of Business. Bhatnagar points to a leaked, confidential corporate strategy plan that projects 37signals will attract twelve billion users by the end of 2013. How will the company overcome the fact that there are only 6.8 billion people alive today? “Why limit users to people?” said Bhatnagar. In order to determine the valuation of companies, Bhatnagar typically applies the following formula: [(Twitter followers x Facebook fans) + (# of employees x 1000)] x (RSS subscribers + daily page views) + (monthly burn rate x Google’s stock price)2 and then doubles if it they use Ruby on Rails or if the CEO has run a business into the ground before. Bhatnagar admits the math is mostly a guess but points out that “the press eats it up.”
Since the founding team (obviously?) can't manage a company that has suddenly become this valuable, 37Signals has hired a former YouTube executive Mr. Mirage as COO. His comment:
“37signals will lead the new global movement filled with imaginary assumptions on growth and monetization potential,” he continued. “We’re excited to roll out a list of unconfirmed revenue possibilities that involve crowdsourcing, a robust set of widget creation tools, 3G, augmented reality, social stuff, and an app store. Also, everything we make will include a compass.” 
Venture Intelligence is the leading 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.

November 28, 2015

Businessworld article on Startup Acquisitions

Businessworld has an article based on Venture Intelligence data on VC-backed startups acquiring their peers.

Venture Intelligence is the leading 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.

November 24, 2015

Why won't NSE & BSE eat their own dog food - aka become listed entities themselves?

The Firm show on CNBC-TV18 has a report enquiring into why the leading Indian stock exchanges - BSE and NSE - haven't gone public themselves - especially after raising Private Equity capital with a clear understanding that such investors would seek profitable exits within a few years. With no revert from SEBI on clearances for the exchange IPOs, the PE investors in these exchanges have written to the Finance Minister and speak openly about their frustration.

View the report video here and text version here.

Extracts:
Sohil Chand, MD, NVP India:
“I think what is important is to see what has happened to the multiple and the Rs 3,950 represents a multiple of only 14 times trailing earnings. When we look at comparable stock exchanges, the listed stock exchanges whether it is Hong Kong or Singapore or other comparable markets, they traded 30 times forward earnings. So, in our estimate the NSE right now, the private markets are undervaluing it by 50 percent.”
...“The listed stock exchange model is one that is well established throughout the world. Every major developed country in the world whether it is the US, UK or Japan, China, Hong Kong, Singapore, Germany they all have listed stock exchanges. The country’s which don’t have listed stock exchanges are countries like Saudi Arabia, Argentina. I think we need to decide which category we want India to be viewed in.”  
 Rahul Mehta, Director, Argonaut Private Equity:
“We are long-term investors, at the same time we are not necessarily running a charity. So, we invest under very strict procedures, under procedures where we know when our money is going to coming back to us and what kind of expected returns we have. We can certainly live with regular business risk and that is something we live with everyday but what we cannot understand is risk that comes out of regulations changing.”   
...Chitra Ramkrishna, MD & CEO, NSE
“For any company that lists on NSE, I offer a value proposition of liquidity, index, derivatives, etc. I genuinely believe that this is tremendous benefit that I can offer the securities that are listed on NSE. It is only natural that my shareholders want to see the same benefit for the NSE shares.”
Would you like a break down of Private Equity investments in BSE and NSE? Head over to the 
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November 22, 2015

VC-backed Startups Solving Exit Problem?

Economic Times has an infographic based on Venture Intelligence data on the phenomenon of VC-backed startups acquiring their peers.


The Venture Intelligence infographic on the same phenomenon:



Venture Intelligence is the leading 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.

November 10, 2015

How Many E-Tailers Will Remain Standing by Diwali 2016?

Alok Goyal of SAIF Partners (and prior to that CEO of FreeCharge and redBus) writes in Economic Times:
According to various industry sources, the total burn rate across the top 10 ecommerce players appears to be ~$9 million per day...If we were to assume a year-on-year growth of 150%, by next Diwali, the top 10 companies would need about $22 million per day to sustain business with the current unit economics. That means companies will burn about $6 billion to sustain the current trend until next Diwali.  
There are hardly any investors out there who can support that pace of cash burn. 
Venture Intelligence is the leading 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.

November 08, 2015

TinyOwl Tamasha Triggers Advise Avalanche

A lot of pontification is flying around for TinyOwl, the food ordering startup that's landed in big trouble - much like the other young IIT Bombay alumni founded startup Housing.com. (Prior to the latest "layoffs triggered hostage crisis" at the company, one had noticed TinyOwl - apart from its remarkable back-to-back funding announcements - mainly for a tweet on how, between cash backs from it and Paytm, one could get paid to eat!)

Arvind K. Singhal, Chairman and MD of retail consulting firm Technopak, has used the goings on at TinyOwl, to ring the death-knell for startups across categories. "These incidents highlight some bitter realities about the Indian startup ecosystem, which have so far been overshadowed by the multi-billion dollar valuations of a handful of companies, and the multi-million dollar funding rounds they have done. I believe that such ugly incidents are in store for several other companies in India’s fledgling startup ecosystem. In fact, these problems may well emerge in the much-celebrated e-commerce space in the future, I expect at least one major online marketplace player to shut down or severely rationalise its operations within the next 24 months. That could lead to tens of thousands of employees getting directly impacted." he writes in the Quartz.

VC investor Pankaj Jain of 500 Startups has countered Singhal in a MediaNama post saying:
"...the Indian startup scene is far broader and diverse than this one small sector. The food and grocery delivery vertical has been overfunded. Some of the companies closing rounds forced me to scratch my head and ask, “what am I not getting?” That’s Ok. You know why? There are amazing entrepreneurs and developers, and designers and financial wizards building solid businesses. And guess what, it’s not going to stop. What else isn’t going to stop? The funding of great companies but also of companies that aren’t run very well.
...At 500 Startups, we’re not going to slow down our investing in India. In fact, I love all this talk of doom and gloom. Why? It’s going to send wannabe founders, angels (who figured they can make more money investing in startups than real-estate) and the glory seekers running for the hills. This means less noise, serious founders pushing the limits of creative destruction because they will have to do more with less, and investors, in it for the long haul, getting access to great founders building real companies."
The TinyOwl episode has also served to inspire NextBigWhat to follow up its Diwali call for "startups and investors to clean up their mess" with an idea for an on-demand service that will fly in bouncers to defend startup founders!

Venture Intelligence is the leading 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.

November 07, 2015

CanBank Venture Capital Fund to manage Government of India's Electronics Development Fund

From the Press Release:

As part of  Digital India Agenda, Government of India it  is envisaged to develop the Electronic System Design & Manufacturing (ESDM) and IT Sector to achieve net zero imports by 2020. As part of this initiative, Department of Electronics & Information Technology (DeitY), Ministry of  Communication and Information  Technology, Government of India has appointed CanBank Venture Capital Fund Limited (CVCFL)  as Fund Manager to house and manage  the Electronics Development Fund (EDF).

EDF as a “Fund-of-Fund” shall participate in “Daughter Funds” which in turn will provide risk capital to companies developing new technologies in the area of Electronics, Nano Electronics & Information Technology. The corpus of the EDF could be up to Rs.2,200 crore  to be committed  in select Daughter Funds by March 31, 2017.  CVCFL organized a pre- launch event -Symposium on Electronics Development Fund in Mumbai (on November 5, 2015) for announcing the EDF to Angel/VC/PE Funds and Electronics  and IT Industry.

Mr. J.S.Deepak, IAS, Secretary, DeitY during his Inaugural Address at the Symposium on Electronics Development Fund, highlighted the initiatives of Government of India in promoting manufacturing in the Electronics Sector.  He said that  demand for electronics is estimated to be USD400 billion by 2020.  The Government is focused on reducing reliance on imports in this sector by promoting indigenous manufacturing.  EDF is one such step in this direction. The  EDF model will enable capital from the government to be channelized  to needy start ups and manufacturing units  by professional fund managers in an autonomous manner.

As  Keynote Speaker, Dr. Ajay Kumar, IAS, Additional Secretary, DeitY, informed the much awaited Policy on Electronic Development  finally has taken shape.  In this regard, the GOI  is pleased to partner with CVCFL for implementing EDF.  “The ultimate goal of EDF is to reduce the country’s ballooning import bill on account of increasing  demand for electronic devices and technology. The capital from EDF can be deployed across the entire value chain and ecosystem of ESDM including companies focused on Fabless Semiconductors, R&D, and materials technologies for electronic devices “, he said. He emphasized that in tune with the call given by the Hon’ble Prime Minister, Design in India will be given an impetus through EDF.


(Left to Right): Mr. Harideesh Kumar B, Executive Director, Canara Bank; Mr. Rakesh Sharma, MD & CEO, Canara Bank; Mr. J.S. Deepak (IAS), Secretary, Department of Electronics & Information Technology (DeitY); Dr. Ajay Kumar (IAS), Additional Secretary, DeitY; and Mr.S.Thiruvadi, Managing Director, Canbank Venture Capital Fund Limited 

Mr. Rakesh Sharma, MD& CEO of Canara Bank presided over the programme.  He said, “Canara Bank will be a partner in the initiative of DeitY in promoting ESDM Sector through its subsidiary Canbank Venture Capital Fund who are fund managers of EDF. The Bank will also  lend  support to the Electronics and ESDM sector  through debt in this initiative”.

Mr. S.Thiruvadi, Managing Director, CVCFL said EDF,   would especially seek to encourage investments in ventures in the ESDM and related sectors that normal commercial investors would shy away from, owing to higher risks involved. Spelling out the process of how the daughter funds would be evaluated, he added that EDF would be open to invest in funds floated by both Indian and foreign fund managers, as long as the daughter fund’s corpus is dedicated to investments in India.
Mr. Harideesh Kumar B, Executive Director of Canara Bank participated in the programme and laid out the initiatives of CVCFL in venture capital segment so far.

The symposium also witnessed thought provoking and interactive panel discussions involving leading academician Prof. Navakantha Bhat, IISc, Venture Capital investors (including Dr. Hemant Kanakia from  Walden International, Mr. Ajay Lakhotia from Imprint Ventures and Mr.Chinnu Senthilkumar from Exfinity Ventures), entrepreneurs and senior executives from the ESDM sector (including Hariom Rai, Founder, Lava International; Narendra Narayanan, MD, Vinyas Innovation  Technologies; Ramesh Hebbar, DGM, Larsen & Toubro; Mr. A. Gururaj, MD, Vittal Innovation City and Mr. Raja Manickam, Co-founder, Tessolve) and advisory firms (including Mr.Sridhar Venkiteswaran, ED, Avalon Consulting and Mr.S.Bhanuchandran, Founder, Strategic Business Consultant).

Venture Intelligence, the leading provider of data and analytics on Private Equity, Venture Capital and M&A transaction activity in India, was the event partner.

November 03, 2015

Why Uber is Not Going to Stop Anyone (in India) from Owning A Car Anytime Soon

Deepak Shenoy of Capital Mind has an interesting post on MediaNama titled "The Economics of Using Uber in India". Extracts:
Uber advertises its lowest fare in Bangalore at Rs. 7 per km charge but that is utter bull. For an average 10 km ride in the city, it costs much more:
a Rs. 35 base charge that has no free usage, which would be Rs. 3.5 per km.
Rs. 7 per kilometer run
Rs. 1 per minute as a driver fee. For an average of 3 minutes per kilometer this comes to Rs. 3 per km.
These add up to Rs. 13.5 per kilometer. That’s how much you pay for an auto as well.
...The annual costs of a car are tiny nowadays (Rs. 1 per kilometer, assuming Rs. 12,000 service costs for Rs. 12,000 driven). So if my car gives me 12 kms to a liter of petrol, i’m still paying just Rs. 5.5 per km for petrol and Rs. 1 for parking.
Add to this the convenience of owning a car, the ability to get groceries from hypermarkets that can’t or won’t deliver, the ability to drive your kids to a location just 2 minutes away because walking will kill you (welcome to Bangalore, just don’t walk anywhere). And the underappreciated advantage of being able to just up and leave at 6 am to smell the fresh air in the western ghats.
And then, Uber cars are not available when you want them – wait times are upwards of 10 minutes most of the time, unless you’re in a favoured location. Then, there are spikes – if it rains, Uber goes to 1.5x “surge” pricing. All this will not vanish because drivers too have their economics which ensures such practices (long wait times, surge pricing) will continue. 
Venture Intelligence is the leading 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.

October 29, 2015

Why Private Equity Investors are Very Hungry!

If Venture Capital (VC) investors are busy chasing Internet & Mobile companies, how are their Private Equity cousins keeping busy? Some of them at least are gobbling up food businesses:



Venture Intelligence is the leading 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.

October 15, 2015

VC Firm Ventureast invites Pitches via Twitter!

Ventureast brings to you “The 160 character Pitch” challenge. If you are an entrepreneur looking to get your start-up funded, or have a disruptive business idea, pitch to us in ONE TWEET! Remember to tag us with @Ventureast. If your’s is among the best entries selected, you will be invited for a private chat with the Ventureast team at the upcoming TiECON Chennai 2015. For more details about this challenge, please visit our website.

Surge in Early Stage deals powers Venture Capital investments to all time high

Early Stage investments cross $1-B mark for first time; Internet & Mobile Cos continue to rule the roost 

In just the first nine months of 2015, Venture Capital investments in India – at 323 deals worth $1,438 million - have crossed the previous historical high of 2014 (which had witnessed 304 investments worth $1,170 million across the entire year), according to data from Venture Intelligence , a research service focused on private company financials, transactions and their valuations. (Venture Intelligence classifies Venture Capital as first to fourth round of investments of not more than $20 million each by financial investors into companies not more than 10 years old.)

Venture Capital firms invested $536 million over 111 deals in India during the three months ending September 2015 – again record figures for a single quarter, the Venture Intelligence analysis showed. The investment activity during Q3’15 was 41% higher compared to the same period in 2014 (which had witnessed 79 investments worth $264 million). The activity level was 9% higher to the immediate previous quarter (which had witnessed 102 deals worth $473 million).

The main action was concentrated in the Early Stage investment segment (Seed, First and Second Round investments in companies not more than 5 years old) which, for the first time ever, has attracted over $1 billion in investments in 2015 ($1,018 million across 266 investments in the first nine months) – compared to the previous high of $553 million (across 167 transactions) in 2011 (full year).

By Industry

The overwhelming attraction of Information Technology and IT-Enabled Services (IT & ITES) companies – especially Internet & Mobile firms -  to Venture Capitalists continued in Q3’15 with the industry accounting for 79 investment worth $376 million (71% of the VC investments in volume terms and 70% in value terms).

Within IT, the larger investments by size reported during Q3’15 included Tiger Global’s $20 million fresh investment in mobile-based news service News in Shorts and a similar amount attracted by engineering services BPO Allygrow in a round led by Zodius Capital.  Tiger Global also participated in two $15 million rounds during Q3’15 – for online hotel and hostel aggregator Zostel (along with Orios Ventures and others) and online shopping recommendations platform Relevant E-Solutions.

Accel India participated in an $18 million round raised by US-based SaaS Data Analytics company Paxata and a $16 million follow-on investment into its existing portfolio company – jewelery e-tailer BlueStone.com. Two online marketplace services for pre-owned automobiles attracted about $15 million rounds each during the period: Droom from Japan-based Beenos Partners and Lightbox VC and CredR from Eight Roads Ventures (formerly Fidelity Growth Partners).



Food & Beverages companies were the second favorite destination for VC investors in Q3’15 (albeit a distant second behind IT) attracting six investments worth $27 million. Restaurant chains were in particular favor with Goldman Sachs backing pan-Asian restaurant brand Mamagoto with a $10 million investment and tea chain Chai Point attracting a similar sized second round led by Eight Roads Ventures (formerly Fidelity Growth Partners).

Among Healthcare & Life Sciences companies (which attracted four investment worth $43 million), Sequoia Capital India accounted for two deals: it committed $20 million to bio informatics firm MedGenome and $19 million women’s reproductive healthcare focused drugs maker Akumentis Healthcare.



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October 13, 2015

What's Up with the Canaan India Team?

Ever since US-based venture capital firm Canaan Partners decided (in 2014) to scale down its India operations,   Venture Intelligence has been keenly tracking what its India team - headed by one of the country's first entrepreneur-turned-VC Alok Mittal- would do next.  The answer is now in...


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October 06, 2015

The Modi - Private Equity Connect. Brought to you by VI !


Lots of  Venture Intelligence data coverage on ET and elsewhere today. Let the good times roll!

Venture Intelligence is the leading 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.

October 05, 2015

Record Jul-Sep quarter poises PE investments to cross all time high in 2015

Q3’15 tally up 125% to $5.9-B; IT & ITES Cos Grab Majority of the pie; Buyout deals make a comeback 

With the nine month investment tally touching $13 billion (across 504 transactions), Private Equity investments in India for 2015 are poised to cross the historical highs of 2007 (which had witnessed $14.7 billion being invested across 535 transactions), shows data from Venture Intelligence (http://VIonWeb.com), a research service focused on private company financials, transactions and their valuations. PE firms invested a record $5,893 million (across 177 deals) during the quarter ended September 2015, up 125% over that invested in the same period last year ($2,621 million across 126 transactions) and 38% higher than the immediate previous quarter (which had witnessed $4,272 million being invested across 151 transactions). The nine month PE investment tally for 2015 is 82% more than the $7,131 million across 387 transactions in the first nine months of 2014, the Venture Intelligence data showed. Note: All figures in this note are exclusive of PE investments in Real Estate and strategic investments from players like Alibaba, etc. 

There were as many as 16 PE investments worth $100 million or more (with seven over $200-M) during Q3’15 compared to three such transactions in the same period last year and 11 during the immediate previous quarter, the Venture Intelligence analysis showed. Apart from the Internet “Unicorns” of Flipkart, Snapdeal and Ola – which raised $700 million, $500 million $245 million respectively – others large PE investments in Q3’15 included the $500 million investment by TA Associates and India Value Fund in ACT Broadband, Blackstone’s $383 million repurchase of BPO firm Intelenet (from UK’s Serco) and Bain Capital’s $200 million infusion in publicly listed non banking financial services firm L&T Finance

IT Companies Grab Majority Share of Pie  

The mega deals in the Internet sector along with the Blackstone buyout of Intelenet ensured that IT & ITES companies grabbed 57% of the PE investment by value (attracting $3,358 million across 107 deals) during Q3’15. Other Internet companies that attracted $100 million rounds in Q3'15 included music service Saavn.com, furniture e-tailer Pepperfry.com and hotels aggregator Oyo Rooms. Tata Capital meanwhile was reported to have committed a similar amount as part of US-based taxi hailing app firm Uber's latest fund raise. 

Energy companies surged to second spot attracting $549 million across seven transactions led by the GIC - Greenko Group ($256 million), I Squared Capital – Amplus Energy ($150 million) and Macquarie – Ind-Bharath Energy transactions. 

PE Investments by Industry – Q3’15 (by Value)




Buyouts Stage Comeback Growth Capital investments in unlisted companies accounted for 68% of the PE investment pie during Q3’15 (including Venture Capital type investments which accounted for 10% of the pie by value). Buyout type investments saw a spurt in interest and, at 11 investments worth $1,496 million, accounted for as much of 26% of the pie (in value terms). The ACT, Intelenet and Greenko deals were followed by the Fairfax Group’s buyout of a 74% stake in agri-logistics firm National Collateral Management Services for INR 800 crore ($126 million) and ChrysCapital’s $63 million buyout of US-based IT Services firm Infogain

Despite the Bain Capital – L&T Finance deal, PE investments in listed companies (PIPEs) – at 8 investments worth $341 million - accounted for just 6% of the investment pie (by value) during Q3’15. Another notable transaction in the segment was KKR Special Situations Fund investing INR 491 Cr ($77 million) in polyester yarn maker JBF Industries. StanChart PE, Apax Partners and Temasek acquired additional shares in existing listed portfolio companies of Prime Focus, Shriram City Union Finance and Justdial respectively via the public markets. 

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Venture Intelligence, a division of TSJ Media Pvt. Ltd., is the leading source of information on private company financials, transactions and their valuations in India. For more information, please visit http://www.ventureintelligence.com

October 04, 2015

Are Corporate Accelerators a Farce?

Anand Sanwal of CB Insights believes they are. Extract from his recent newsletter article.
When I see a big corporation launch a buzzwordy accelerator program, I hear the sound of money getting flushed down the toilet. They launch these to get some buzz/look cool and, in theory, support and learn from startups. But here's the rub: if you're a giant, slow-moving company not known for being particularly innovative, the startups attracted to your accelerator are going to be 2nd or 3rd tier. 
..That said, if you are focused on trying to "look innovative," here is the full list of tactics..: 
* Build a startup-y office with an open floor plan, showers, and an Xbox/Playstation... 
* Launch an innovation lab or accelerator. It doesn't matter what it does (if anything) — but do this. 
* Tell people that you don't wear suits and that you wear jeans to work.
Venture Intelligence is the leading 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.

September 30, 2015

Why Flipkart & Snapdeal Can't IPO and Why the Chinese are Invading the Indian Internet Market

The latest $700 million funding for Flipkart got announced not in the form of press releases as on previous occasions, but through leaks and confirmations. Also, the new round does not seem to have attracted any new investors. The closure of rival Snapdeal's $500 million round is reported to have been protracted over mismatch in valuation expectations.

Why the seeming nervousness among investors over India's two E-Commerce poster children?

Is it the crash of Alibaba's stock price in recent months? Or something else?

Media executive-turned-Private Equity investor Haresh Chawla has some answers in his new post at Founding Fuel. Extracts:

On why an IPO is impractical for Flipkart, SnapDeal
Most listed Unicorns in the West eventually trade at earning multiples that range between 40 and 60 times their earnings. Listed Indian internet companies like Naukri, Justdial and Makemytrip trade at similar multiples....Flipkart, now eight years old, to justify its $15 billion valuation should have generated about $300 million after tax this year.  
..So far they have been more ambitious than others and have been able to convince investors they will build value in the future. It seems their idea of innovation is to acquire teams and then hope to integrate them into their larger enterprise. But we are yet to see a single one of those experiments work successfully. Their ability to retain founders post acquisition remains dismal as well. And logistics infrastructure is no longer a source of competitive advantage. The acute pressure to innovate starts now.
Chinese firms as the only potential buyers
They are live examples of how the holding-company model works. Between Baidu, Tencent, Alibaba and a few other players, they control a significant chunk of the Chinese online market. They have seen success in “controlling” large chunks of an ecosystem. They believe they can force network-effects into unrelated businesses. They know an assault on Silicon Valley is difficult and Europe is too small. That leaves India as their next beachhead. They will want these Indian Unicorns. (As I write this piece, Ola, another Indian unicorn, raised money from Chinese strategic investor Didi Kuaidi. The Chinese invasion has begun.)
Venture Intelligence is the leading 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.


September 29, 2015

Do VCs need to be "good" guys to succeed?

Y-Combinator founder Paul Graham thinks so. Citing the example of uber angel investor Ron Conway (Google, Facebook, Twitter), he explains why in his recent blog post (emphasis mine):
The startup world became more transparent and more unpredictable. Both make it harder to seem good without actually being good.  It's obvious why transparency has that effect. When an investor maltreats a founder now, it gets out. Maybe not all the way to the press, but other founders hear about it, and that means that investor starts to lose deals. 
The effect of unpredictability is more subtle. It increases the work of being inconsistent. If you're going to be two-faced, you have to know who you should be nice to and who you can get away with being nasty to. In the startup world, things change so rapidly that you can't tell. The random college kid you talk to today might in a couple years be the CEO of the hottest startup in the Valley. If you can't tell who to be nice to, you have to be nice to everyone. And probably the only people who can manage that are the people who are genuinely good. In a sufficiently connected and unpredictable world, you can't seem good without being good. 
...Good does not mean being a pushover. I would not want to face an angry Ronco. But if Ron's angry at you, it's because you did something wrong. Ron is so old school he's Old Testament. He will smite you in his just wrath, but there's no malice in it.
The post also reminded me of a term that's gaining currency recently: Reputation Capital.

Venture Intelligence is the leading 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.

Will InMobi Continue to Rejoice its Spurning of Google's $1-B Offer?

Silicon Valley lore has several famous episodes of acquisition talks that did not materialize: from that of Google by Excite (whose CEO apparently refused to pay up $75,000) and by Yahoo (when the Google founders walked away from a $3-B offer) and that of Yahoo (for $44.6 B) by Microsoft.

In March 2015, the lore extended to Indian shores when,  InMobi - which dares to combat Google and Facebook in the mobile advertising segment - walked away from a $1 billion offer from the search engine giant (according to multiple media reports, sample: Business Insider).

Will InMobi CEO Naveen Tewari's decision to walk away turn out as well as that of Google's own or more Yahoo like? Only time will tell. But questions are being raised as to why, when other Indian startups like Flipkart, Snapdeal and Ola are able to attract investments at  valuations of multiple billions of dollars with seeming ease over the last couple of years, hasn't InMobi (that last raised a reported $200 million in 2011 from SoftBank at a $800 million valuation) joined the "Unicorn" party?

The Economic Times of today (September 29, 2015) has a not too flattering report saying InMobi has attracted $100 million in debt funding from US-based Tennenbaum Capital that would be also used to repay debt that the company had borrowed from other creditors last year.


So, who exactly is InMobi's latest backer, Tennenbaum Capital?

This is how the firm describes itself on its LinkedIn page:
Tennenbaum Capital Partners takes a private equity approach to distressed credit investing. Having invested over $8 billion in more than 160 companies since 1996, TCP is a leader in successfully taking positions in private and public middle-market companies's debt, both in the secondary market and through special-situation private originations.
On its web site, the firm describes its Investment Strategies as two fold:
TCP invests in both performing credit and special situations, primarily in North American middle-market companies. 
Here's hoping that InMobi - an early poster child of India's second startup wave - continues to perform more than just creditably and sail smoothly into publicly traded status that it's CEO believes it deserves.

Venture Intelligence is the leading 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.

Zero in on Cos Seeking Angel Funding in Your City


With enthusiasm for angel investments in India at an all time high, Venture Intelligence is happy to announce a new feature to its Angel Investments database: the ability to search listings of companies seeking angel / seed capital in your city.

Integrating company and investor profiles from the world’s best known angel deals platform - AngelList - the Venture Intelligence Angel Investments database allows its users to further search and filter listings by company name, city and amount of funding sought.

To look up companies seeking angel capital in your city right away, just login to the Venture Intelligence PE/VC Deal Database. Don’t have a login? Contact Us for a demo.

Zoho Founder on Competing with Companies Raising "Series QE" Funding

From the article by the Zoho founder Sridhar Vembu in Economic Times:
Another day , another hot tech company raises $500 million (or is it a billion?) in Series D, Series E -I propose we just call all of it Series QE, because that is where all the money comes from anyway , right?  
..If you are in one of those hot companies burning cash, enjoy the ride as long as it lasts--and make sure you have a safety net if, heaven forbid, something bad happens. But what about companies that cannot or don't want to raise that kind of money? 
...In the world of business and finance, following fashion is the path to the poorhouse. Avoiding the fashionable location, the fashionable field and, dare I say , fashionable employees, may be the best way to survive a bubble.
Venture Intelligence is the leading 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.

September 21, 2015

Why Angels & Seed Funds Might Be Better For Seed Rounds

With Tiger Global and other global investors straying into VC territory in the hunt for the next set of Unicorns, the ( Lee Fix(el)ated ? ) Indian VC firms - whose fund size mathematics earlier disallowed them from "writing cheques" of less than $1-2 million - have been actively foraying into seed funding zone competing and often co-investing with angels and seed funds.

But what type of investor should entrepreneurs prefer for their seed round - if they have the luxury of a choice between angels, seed funds and VC firms? Mukund Mohan, the former head of Microsoft Ventures, recommends going with angels and seed firms. Extracts from his post titled "Does raising institutional money at the seed stage help or hurt?":
If you are looking to raise money and you have an interested later-stage VC investor willing to put money in your company, by all means you should take it. Assuming they will invest later is a big leap of faith. There are, like most things in the startup world pros and cons to this approach.  
The pros include the “name brand” value of the VC firm on your cap table early on, the ability to tap into the expertise of the VC investors and also access to their network and connections. The downsides are the signalling effect if they refuse to invest in the follow on round, the likelihood of them investing in other competing startups in the same space in later round (since they understand the market) and finally the smaller pool of investors available for you (since many VC’s wont invest if a lead VC investor passes on the follow on) in the next round. 
While I dont think there are many options in India for entrepreneurs, the best bet I would still recommend is to get the right investors at the right stage of your company. At the early stage, angel and seed stage firms make sense, and later on using their help to get VC’s is a good approach.
Venture Intelligence is the leading 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.

September 16, 2015

Is Mr.Tata Risking Too Much Capital on Startups?




Venture Intelligence is the leading 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.

September 06, 2015

Is Angel Investing Worth the Bother?

Haresh Chawla, an angel investor in Housing.com, has a list of do's and don'ts for fellow angel investors in Founding Fuel. Extracts:

2. Don’t do it for the money. Most angel portfolios won’t beat returns on Indian small-caps and mid-caps. Plus you’ll save a mighty load of your time. So learn to play the guitar if you are bored.
3. If you still persist, choose a style or a combination from here:
Spray and Pray: Put in Rs 5-25 lakh—do tens of deals. Eight angels in a start-up means you are hardly going to have a say, or the inclination to spend time. But sure you’ll meet interesting people, and be covered in business newspapers. Sometimes you’ll also be mentioned in the same breath as *trophy* investors.
Consortium: A new structure that has cropped up lately—everyone can be an Angel now! One guy fronts 20-30 of you investors. It works. Downside? The front is usually too busy monitoring than mentoring. Oh, and you’ll miss out on the PR as well.
The Real Deal: You’re ready to lose both your money and your time. If that is the case, what follows here is for you. The rest of you can go back to sipping your single-malts.  
16. Misalignments will happen. The next round investors will drive some of the misalignment—on rights, on size of the Employee Stock Ownership Plan (ESOP) pool, on secondary price etc. Founders will be torn—they will act only in the interest of the business and their stake holding and that’s only fair. You can get very sensitive, but don’t. In times like these, remember what I spoke of in Point #5. You’re in it for the ride.
Venture Intelligence is the leading 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.

September 04, 2015

Will the Education Sector Throw Up a Billion Dollar Company? Yeah, Fine "Unicorn".

Siddhartha Jain has a nice analysis on why we haven't seen an Indian Education Unicon emerge yet. And why we still might.

Venture Intelligence is the leading 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.

Forbes India "Hidden Gems" List

 

Forbes India has put out its latest "Hidden Gems" Cover Story profiling 13 interesting businesses -from bus operator Prasanna Purple to lifestyle brand Hidesign, jewellery maker Kalyan Jewellers to coaching firm Resonance Eduventures and pharma venture Laurus Labs. For the fourth year running, we at Venture Intelligence, are happy to have partnered Forbes journalists in putting together this list by leveraging our databases on Private Company Financials, Transactions their Valuations.

September 03, 2015

Healthy Sign: IPOs Do Well Despite Shaky Secondary Market


Venture Intelligence is the leading 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.

August 20, 2015

Logistics: The "Shovels & Pickaxes" of E-Commerce Gold Rush?

Venture Intelligence is the leading 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.

IT Deals Dominate M&A Landscape



Venture Intelligence is the leading 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.

Snapping the Deal

It all seems to have started with Snapdeal's Kunal Bahl and Mr Ratan Tata (in Aug 2014)

     Source: NBW

And then Paytm/One97's Vijay Shekhar Sharma took it international with Alibaba's Jack Ma (Feb 2015)

     Source: FirstPost

According to Economic Times, the latest $500 million investment in Snapdeal (led by Foxconn, Alibaba and SoftBank ) - which has been reported about for several months now - faced "protracted negotiations" over the company's valuation. Another angle journalists might want to consider (for such delays) is how long it takes to synch up schedules of international personalities (who seem to call all the shots in Indian E/M-Commerce these days) to line up something like this:

     Snapdeal founders with Alibaba's Jack Ma and SoftBank's Nikesh Arora

The Venture Intelligence PE/VC Deals Database currently captures 25+ data points for  private company transactions - with valuation multiples enjoying pride of place. Going by the trend of deals getting linked to photo ops, looks like we now need to add a new multi-media field as well - titled (what else?): Deal Snap!

PS: Which Indian Entrepreneur is going to be the first to Deal Snap with the man who started it all for Indian E- & M-Commerce funding: Lee Fixel of Tiger Global?

PPS: Other Key Deal Snaps (via Google Images):

Paytm's Vijay Shekhar Sharma with Tata

Ola's Bhavish Agarwal with  Tata

Venture Intelligence is the leading 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.

August 18, 2015

On Indian E-Commerce Valuation

In an interview to Mint, Aswath Damodaran - the well known US-based valuations expert  - has opined that India’s e-commerce and consumer technology start-ups "may be collectively overvalued". "The size of the macro story may not justify the micro-valuations," he says.

Economic Times (in its Corporate Dossier supplement) had earlier featured the views of two local practitioners - Sharad Sharma, Angel Investor and Jacob Mathew, Founder of MAPE Advisory - on the same topic.

Sound Byte from Sharad Sharma:
"Unfortunately, due to just one individual - Lee Fixel of Tiger Global - Flipkart has gone from being a poster child to being the single biggest risk to the technology ecosystem." 

His main argument:
Right now, Flipkart is valued at about $500 per transacting user. This is comparable to what Vodafone paid for Hutch in 2007 - the most expensive mobile operator acquisition ever. Built into the Vodafone offer at that time was a belief that the hockey stick subscriber growth would happen in the coming years. And indeed, that did take place. The Vodafone subscriber base has grown from 22 mn in 2007 to 173 mn today. E-commerce players like to point to this mobile growth story to justify their current sky-high valuations. India is not China. There are only 50 mn households in India with disposable income of Rs 3 lakhs or more. And, offline retail isn't going away like landlines. It's a lot stickier than we imagine. In US, even today 10 of 11 dollars are spent offline and this share isn't shifting dramatically. Given all this, further valuation growth in Flipkart from here would be in completely uncharted territory. After all, Flipkart is already at a 2-3X multiple on GMV compared to Alibaba's 0.7X. 
Sound Byte from Jacob Mathew (quoting a friend) :
"Earlier, enterprises were about selling to consumers and giving dividend to shareholders; current mood is all about selling to shareholders and giving dividend to consumers." 
His main argument:
Valuations are too much into the future and are based on humungous assumptions. You can justify the Flipkart valuation if you assume that by 2020 the Indian online market will be $100 bn and they have 60 per cent market share and that they are making EBITDA margins. Will the current $5-6 bn market actually jump to $100 bn in 5 years? Will the leader have 60 per cent market share and that too in a market like India where not much consolidation is happening? Will the topline hold when you are charging all costs plus a small profit margin to the customers? 
Forget valuation, at times the business model itself is problematic. Will buyers pay 2 per cent commission for buying/renting a house in India where the touch point is only online? How can you use a car to home deliver restaurant food with ticket sizes of less than Rs 500/order? Just because somebody has downloaded your shopping app in his/her smart phone, can you start talking about the lifetime value of a customer? 
Venture Intelligence is the leading 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.

August 14, 2015

Where's the Best Growth Among Privately Held Companies?



Venture Intelligence is the leading 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.

August 10, 2015

Will Private Equity Exit Party Last Till Year End?

h


Venture Intelligence is the leading 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.

August 06, 2015

Recommendations for Email Marketing by VCs

Anand Sanwal, Founder of US Venture Capital databased firm CB Insights, has an interesting critique of email pitches he receives from VCs (which, going by number of email types he's quoting, happens quite a lot. Ah, the US market!).  Extract:
Strategy 4: The Warning
Hey Anand,
Joe here from Scary Partners.  Love CB Insights and what you guys are doing.
I know there has been a lot of companies getting funding in your space so was wondering if you have more seriously begun to think about fundraising.  I know you’ve grown out of revenue to-date but as competitors get funded, raising might make some sense to ensure you stay ahead of them.
I would love to chat.
Thanks,
Joe

The Review 
....Cons:
For us, someone else raising doesn’t mean much. We’ve seen a bunch of companies come and go in our space with a lot more money than us. The new entrants will be the same.  And so while this email gets a response, it doesn’t do anything to frame why the firm might be an interesting partner and assumes we’ll raise out of some perceived fear from challengers.
If we were 100% motivated by fear, this pitch might work, but it doesn’t show how the firm would do anything to make us better. The pitch is effectively, some of your upstart competitors have cash. You should have cash too.
Recommendation: Solid start. Tie back why raising money from their firm would be good, i.e. “With more capital, we think we can help you scale the sales organization in a way that materially grows top line and squashes these other cockroaches.”
OR
“We think there are some interesting M&A opportunities for you the space which we think we can assist with in addition to providing you with capital.”
Venture Intelligence is the leading 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.

Justdial's Mani on Making Real Money Online

In an interview to Mint, local search firm Justdial's founder VSS Mani talks about building an Internet business that actually charges customers enough money to make an actual positive bottom line :
It would be fair to say that Mani comes across as a contrarian; one who doesn’t believe in the view that an e-commerce business must lose money. “JD did Rs.600 crore of revenue last year. That is equivalent to roughly Rs.60,000 crore revenue of an e-commerce company in terms of GMV,” he says. Gross merchandise value, or GMV, is a term used in online retailing to indicate total sales of merchandise through a particular marketplace over a certain time frame. "Commerce means making money. You cannot have deep discounts; you cannot buy things for Rs.100 and sell at Rs.80. Or (give) cash back." 
..."we are extremely worried about the way things are,” says Mani. “Today we have the talent pool. In the dotcom days, it was a big challenge. People used to join organizations at double or triple the salary. It is another matter they all lost their jobs in the next six months. They all quit big companies to join Internet companies and most of the time they used to while away in the canteen thinking of all kinds of domain names. That is exactly what is happening today. People are flirting with apps. It doesn’t work like that.”
Venture Intelligence is the leading 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.

July 27, 2015

Where Indian Private Equity investors can tread without fear - well almost!


Venture Intelligence is the leading 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.

July 14, 2015

Khaitan & Co. Tops League Table for Legal Advisors to M&A Transactions in H1 2015

AZB & Partners, Shardul Amarchand Mangaldas complete the Top 3 slots

Khaitan & Co topped the Venture Intelligence League Tables for Legal Advisors to M&A transactions for the first six months of 2015 advising deals with a value tag of $2,237 million (across 14 qualifying transactions). Khaitan & Co. was followed by AZB & Partners which advised deals worth $1,970 million (across 16 deals); Shardul Amarchand Mangaldas ($1,353 million across 9 deals). Amarchand & Mangaldas, before its split, had advised M&A deals worth $1,084 million (across seven deals).

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.

The Khaitan & Co. advised M&A deals during the period included the $315 million buyout of Crompton Greaves Consumer Electricals by Advent International & Temasek and the $400 million acquisition of Freecharge by Snapdeal. Transactions advised by AZB included the $800 million acquisition of womens health business of Famy Care by Mylan Laboratories and the $400 million acquisition of Freecharge by Snapdeal. Transactions advised by Shardul Amarchand Mangaldas included the $404 million strategic investment by Alibaba in Paytm parent One97 Communications and $258 million acquisition of Kesh King by Emami. Amarchand & Mangaldas advised deals included the $200 million acquisition of TaxiforSure by Ola Cabs.

Cross-border firm Convington Burling was an advisor to two deals totaling $925 million: the buyout of InBev India International by Anheuser-Busch InBev from its JV partner RJ Corp and the $800 million acquisition of womens’ health business of Famy Care by Mylan Labratories

The period also saw a lot new entrants like Veritas Legal and Patanjali Associates enter the Venture Intelligence Legal Advisors for M&A league table.

The full league tables can be viewed here

Venture Intelligence is the leading 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.

July 13, 2015

AZB tops Legal Advisor League Table for Private Equity Transactions in H1 2015

Shardul Amarchand Mangaldas, Khaitan & Co. claim the No.2 & No.3 Slots



AZB & Partners has retained its status as the top Legal Advisor for Private Equity transactions during the first six months of the 2015. According to the Venture Intelligence League Tables, AZB advised PE deals worth $2,446 million (across 23 qualifying deals), followed by Shardul Amarchand Mangaldas ($1,219 million across 12 deals); Khaitan & Co ($827 million across 10 deals) and J Sagar Associates ($823 million across 9 deals).

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.

AZB advised deals during H1 2015 included the $383 million investment by Apax Partners in Shriram City Union Finance and the $150 million investment by TPG Capital into Manipal Health Enterprises. Transactions advised by Shardul Amarchand Mangaldas included the $50 million investment by OCP Asia into DQ International and $70 million investment by IDFC Alternatives into OTPC India; Transactions advised by Khaitan & Co included the $150 million investment by Temasek and Advent International into Crompton Greaves Consumer Electricals and $22 million investment by TPG Growth, TR Capital and IDG Ventures India into Lenskart.com. J Sagar Associates advised deals included the $114 million investment by Temasek into Medanta Medicity and the $10 million investment by SAIF, Fidelity Growth Partners, Helion Ventures into Test Preparation firm Toppr.

The period also new entrants like Veritas Legal, Verist Law, Altum Law, LegaLogic Consulting and Morgan Lewis enter the Venture Intelligence Legal Advisors for Private Equity league table.

The full league tables can be viewed here

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