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November 28, 2017

Venture Intelligence - Mint Deal Tracker (November 20)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint - tracking all Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.


To get comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Weekly Newsletter. View a sample DD Newsletter 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.

November 24, 2017

New P2P Lending Regulations: An Entrepreneur Perspective

Venture Intelligence spoke to Mukesh Bubna, Founder & CEO of Peer to Peer (P2P) lending firm Monexo's on his take on the impact of the new RBI regulations on the sector and the expectations going forward.


Venture Intelligence: What was your initial reaction to the recently introduced RBI regulations on P2P?

Mukesh Bubna: RBI ushering P2P platforms as a new class of NBFCs is a welcome move that provides the entire sector increased credibility and reinforces the potential of a marketplace approach to credit delivery. RBI’s insistence on a business continuity plan in case of platform shut down, ‘Fit and proper criteria’ for promoter team are all steps that will boost confidence of platform lenders.

Despite the existence of a few grey areas around definitional constructs and prudential caps on participants’ exposure, the framework does enough to lend clarity on key issues surrounding operational requirements, role of the P2P platform as an intermediary and mandates the adoption of measures that are likely to promote further transparency. The regulator’s willingness to come forth and closely engage and seek the view of P2P platforms post the announcement of guidelines is also reassuring and comforting.


VI: How does the RBI’s order barring P2P companies from lending on its own affect the industry?

MB: The regulations mark off P2P lending as an investment with a defined risk-reward equation. This enables P2P platforms to focus on sourcing unsecured loans and adopt best practices to minimize risk and not attempt to completely eliminate it either by mis-selling or by promotion of approaches that provide for ‘secured returns’. This will also help lenders make better informed decisions and help them adhere to a loan selection policy that is in line with their appetite for risk and expectation of return.


How does the minimum capital requirement and leverage ratio factor, given that P2P companies are to operate only as an intermediary platform? 

Regarding minimum capital requirement, we believe that RBI’s emphasis was on ensuring that the P2P space lends itself as a credible and sustainable environment. While this may appear to be a high cost burden on an entity that is fundamentally not lending its own money or holding funds on its balance sheet, the capital requirement mandate ensures that platforms have sufficient skin in the game and are invested in building a platform that is robust, responsive and scalable. The process of application of a leverage ratio to P2P platforms is however presently ambiguous and we look forward to more clarity on this from the regulator.

On caps on lenders and borrowers? 

The value proposition in a P2P platform from the borrowers’ side has always been that it enables credit inclusion at fair rates of interest. The imposition of a cap on the aggregate amount that can be availed by a borrower, seems in conflict with the vision behind enabling P2P platforms to further democratize the availability of credit across individuals and small businesses. The borrower participation cap may dissuade emerging MSME businesses from tapping into P2P platforms as a viable source of credit.

On the lending side, the introduction of an arbitrary INR 10 lakh limit on lending without due consideration to the nature of the lending participant makes lender acquisition a high volume retail game focused on retail investors - no doubt a large mass market but also one with significantly lower risk appetite.

Having said this, we are optimistic that RBI will be willing to gradually taper off such caps over time which will enable HNIs and institutional investors to look at P2P lending as a ‘serious’ asset class for long term wealth creation.

What will P2P companies now focus on to grow their business? How should VCs evaluate P2P companies going forward?

With RBI regulations in place, the short term focus for the existing P2P players will be applying for registration before January 2018, plugging gaps in current practices and getting compliance requirements and supervision right. The key activities which P2P players have to continue focusing on are (a) Credit model to screen out bad borrowers (b) Digital on boarding of customers (c) Forging key alliances for growth and (d) Managing profitability


For VCs, P2P lending in India is at an early stage of evolution. Most P2P players are raising Pre - Series A or Series A. At this juncture the team and traction are strong pointers for VCs to look at. Currently, VCs are also wondering whether the cap of Rs. 10 lakhs per lender could be hindrance to the growth of the industry. However, no regulation is cast in stone and always evolves as the industry evolves. It is time for the VC's to place their bets.

Where has Monexo hit right with the RBI regulations? What other innovative features has Monexo implemented?

We were the first to implement an operational Escrow account with a leading trustee company when most P2P platforms were still passing around physical cheques between borrowers and lenders. Our decision was in line with RBI’s decision on the need for funds to move directly between borrower and lender’s bank accounts and adoption of the Escrow framework.

At Monexo, we have had disclosure norms focused on promoting transparency such as mandatory regular data sharing with respect to loan statistics, delinquency details etc, which provided useful metrics to lenders with sufficient visibility over the platform’s track record as an intermediary instead of relying on assumptions of credit quality. Having said that, the requirement to share the borrower’s entire information including personal info seems a bit excessive at this stage as it diminishes the platform’s role as an intermediary to manage the marketplace.

We had also adopted a fair approach that affixes each loan on the platform with a fixed interest rate from 13 - 30% and an associated Monexo credit rating compared to alternative approaches that tend to be ‘negotiable’ and ‘bid-based’ between participants in other platforms.


How will the added role of Credit Bureaus help the P2P industry?

The ability to report loans into credit bureaus is a huge positive with significant benefits to both borrowers and lenders. Borrowers who avail loans through P2P platforms have the ability to improve their credit scores over time, subject to good credit behavior while intentional defaulters are heavily disincentivized from entering the system which in turn will provide added comfort to lenders.


Is the regulation in line with Monexo’s and industry expectations?

Overall, our view is that the RBI has pursued a progressive agenda focused on arming P2P platforms as NBFC’s that will pursue an alternative credit model focused on expanding and deepening access – driven by innovation, reduced costs and increased transparency. The regulation provides the P2P industry with the recognition that it has the ability to be a transformative new addition to India’s consumer finance ecosystem.

At Monexo, we are already beginning to see enormous enthusiasm from the investing community which is now beginning to take notice of P2P lending as an official asset class that is backed by a regulatory framework. No piece of regulation can claim itself as being entirely perfect and in that context - the regulator’s conservative tone in terms of participatory caps and minor definition vacuums, we hope, will gradually evolve into a more perfect framework that provides aspiring fintech startups like Monexo the ammunition to operate on a larger canvas focused on pioneering a more efficient, scalable approach to consumer credit needs. 

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.

November 23, 2017

2017 Is The Biggest Year For PE/VC Exits: Business World

A Business World report quotes Venture Intelligence data on 2017 being the biggest year for Private Equity and Venture Capital exits in :
Data available with research firm Venture Intelligence shows fund managers have already recorded 213 exits worth $10 Billion so far this calendar year, making 2017 a bumper year for PE/VC exits. And, that is not all. The industry has also witnessed the highest number of PE-backed IPOs. In January-October 2016, total number of PE/VC exits stood at 198 with the total value amounting to $7.4 Billion. During the said months in 2015, as many as 240 PE/VC exits took place worth $9.1 Billion.
Take a look at some of the successful exits this calendar year. SAIF Partners garnered a 26.5x return on its investment in One97 Communications in May 2017 when SoftBank Corp acquired a stake in it in a secondary sale. In a public market sale, TPG Capital made a 4.6x return from its investment in Shriram City Union Finance.
Some of the top PE-backed IPOs in 2017 include AU Small Finance Bank’s listing that helped Warburg Pincus, IFC, ChrysCapital, Kedaara Capital exit and ChrysCapital’s exit from Eris Lifesciences’ IPO.
Wish to view exit insights from our half yearly report on Private Equity and Venture Capital exits? Mail Varatha at research@ventureintelligence.com


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.

Sequoia Capital sells Just Dial stake worth Rs35 crore: Mint

A Mint article quotes Venture Intelligence data on PE/VC investments and exits in JustDial:
Sequoia Capital started selling its stake in Just Dial in the third quarter of the current calendar year. On 5 September, Sequoia Capital sold a total of 3.6 million Just Dial shares worth approximately Rs135 crore, thereby bringing down its shareholding by 5.17% to 4.11%. In 2016, Sequoia Capital sold shares worth around Rs60 crore, while in 2015, it offloaded stake worth about Rs1,218 crore in Just Dial, according to data compiled by Venture Intelligence, a research service focused on private company financials, transactions and valuations. Sequoia Capital first invested in Just Dial in 2009. 
Tiger Global made a complete exit from Just Dial in 2015, data from Venture Intelligence shows. 
Sequoia, along with venture capital firm SAIF Partners and Tiger Global made a investment of Rs16.44 crore in the company in 2009. In 2012, Sequoia invested Rs60 crore along with venture capital firm Sapphire Ventures. Subsequently in 2012, Sequoia made its third investment of Rs305 crore in Just Dial.

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.

November 16, 2017

Venture Intelligence - Mint Deal Tracker (November 6)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint - tracking all Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.

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To get comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Weekly Newsletter. View a sample DD Newsletter 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.

November 14, 2017

How IDG Ventures India's Late Stage Tech strategy is filling a key gap in the VC Ecosystem

With global investors such as Tiger Global and SoftBank vacating the sub-$100 million Late Stage Technology segment - that they were aggressively active during 2014-15 - the Indian Venture Capital ecosystem clearly needs to fill this yawning gap.

In the absence of new funds being raised specifically for this segment, one potential way is for Private Equity firms to "come down" from their typical sweet spot (in terms of both deal values and level of company maturity). The "old India hands" in the PE segment like Warburg Pincus and Temasek have indeed started to dabble in Late Stage Tech investing in the last couple of years. Between them, these firms have invested into companies like Rivigo, Capillary Technologies, CarTrade.com and Manthan Systems. However, given their mandate to invest across multiple sectors, these firms cannot overexpose themselves to just one sector.

The other option is for some of the Early Stage technology investors to “go up” the deal value chain. IDG Ventures India, co-founded by Sudhir Sethi and T.C. Meenakshi Sundaram (who have successfully supported startups in India from the 2000-era - when they had represented Silicon Valley VC firm Walden International), is leading the way on this front. IDG's recent investment in Policybazaar.com, where it co-led the online insurance pioneer's $79 million round (alongside global asset manager Wellington Management and home grown PE firm True North), is a good example of the firm’s Late Stage Tech focus. The firm expects to make at least one or two Late Stage Tech investments each year.


"While retaining our core Early Stage focus, IDG Ventures India started investing about 25% of our Fund II in Late Stage tech companies and this strategy continues in Fund III now," says Sudhir Sethi, IDG Venture India’s Founder & Chairman. The firm had raised its $150 million first fund in 2006, from which it had successfully invested into startups like Myntra (acquired by Flipkart in 2014) and Manthan Systems (exited via Secondary Sale). IDG Ventures India now manages $465 million across four funds. "For Late Stage tech, we will typically come in with a $15 million cheque (which can go up to $30 million) as part of Series D and later rounds where the total round size is above $40 million," Sudhir says. The firm's experience in scaling technology companies has prompted Late Stage Tech investees to invite IDG's representatives onto their board - despite its relatively lower stake holding (compared to when it makes a traditional Early Stage investment). 

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Exit Focus

IDG's Late Stage Tech bets are aimed at fetching exits with time frames of 3-4 years. Some of firm’s 2013-14 Late Stage investments have started to produce good exits. In 2016, IDG successfully steered online travel firm Yatra.com to an Nasdaq listing (via a $92 million reverse merger) - after leading a $19 million fifth round in 2014 and a follow-on investment the next year. IDG is also set to reap significant gains from the additional capital it invested in Flipkart in 2014 - on top of swapping its shares in Myntra - which it is now exiting to new investor SoftBank. (The E-Commerce leader was valued at $3 billion in 2014 and is now valued - as part of the latest investment by SoftBank and others - at over $11 billion.)

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In Dec-13, IDG (alongside Ascent Capital) had invested INR 100 Cr (about $17 million then) in Newgen Software Technologies. The Delhi-based workflow & document management software company has now filed for an IPO. Two of IDG’s vertical e-commerce bets - the eyewear focused Lenskart and baby products e-tailer FirstCry - are aiming to file for IPOs in India soon.

Recent months have witnessed Infosys Co-founder Nandan Nilekani announce a $100 million fund to focus on growth stage technology start-ups. The UC-RNT Fund, a joint venture between the University of California endowment and former Tata Sons Chairman Ratan Tata - who is also an advisor to IDG Ventures India - has contributed over $41 million to cab aggregator Ola's latest round.

With IDG and such well respected Ultra-HNIs showing the way, it looks like fast growth startups that Early Stage investors have been churning out in recent years, will not suffer for the "last mile" capital they need to become self sustaining and publicly traded companies.


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.

November 13, 2017

League Table Update - October 2017


Looking to promote your firm's work to top PE/VC Investors and Corporates - Reach out to Varatha at research@ventureintelligence.com to participate/update your firm's standings. 

Need to track transactions in India? Keep tabs on your competition? Venture Intelligence helps Investment Banks, Legal and other advisory firms track in-depth data on Private Equity, Venture Capital, M&A, Real Estate transactions and Private Companies Financials. Reach out here  to see how we can help you have access to the best data resource on Private Companies.

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.

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November 09, 2017

Focus Turns to New Verticals as Fintech Investments Gathers Pace in Post-DeMo India


Venture Capital investors invested in as many as 8 fintech companies in just the month of October 2017 - representing a new high for the sector during the year. Early Stage investors have been favouring the sector over yesteryear star of B2C E-Commerce making 11 seed and 17 Series A bets in Fintech companies during the tear.

A year after the Indian Government Demonetized ("DeMo") its high value notes, which saw mobile wallet companies like Paytm and Mobikwik gain very significant heft, investors seem to have decided that sufficient funding has gone into the payments category. They are now focused on new verticals within Fintech - especially Insurance marketplaces (Policybazaar, Renewbuy), SME focused lenders (Lendingkart, Capital Float), Credit evaluation (Credit Vidya, Datasigns), micro-credit for students (Krazybee and Slicepay), end-of-month credit for salaried professionals, etc.

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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.

November 06, 2017

Venture Intelligence - Mint Deal Tracker (October 30)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint - tracking all Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.


To get comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Weekly Newsletter. View a sample DD Newsletter 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.

PE/VC Backed IPO: Mahindra Logistics

The IPO of Kedaara Capital backed Mahindra Logistics was subscribed 7.9 times with Kedara Capital making a part exit with INR 415 Cr. The IPO was a complete offer for sale by existing shareholders. With data from Venture Intelligence PE/VC Database and Company Financials Database we look at Mahindra Logistics's journey and how it's investor fared in the IPO.



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.