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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:


Have an comment to add? 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 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.