Monday, July 3, 2017

Foreign venture capitals make over $1 bn in H1 of 2017 from Indian investments

Jul 04 2017 : The Times of India (Chennai)
EXIT MODE - VCs make over $1 bn in H1 of 2017

2017 is on track to becoming a bumper year for venture capital exits in India, on the back of mega cash exits worth $650 million from One 97 Communications, (the parent company of Paytm), VC investors have harvested over $1 billion via exitssecondary sales during the first six months of the year.The numbers recorded in the first six months on 2017 are comparable to the first half of 2015 which had witnessed exits fromFreeCharge and TaxiForSure. Unlike the mega exits of 2015, which involved large stock swap components, the larger exits of 2017 are actual cash realisations, Venture Intelligence, a data research firm said. SAIF Partners and Saama Capital, who first invested in One 97 a decade ago, sold their stakes to the company's new investors, SoftBank and Alibaba Group respectively to realize returns of 26 times and 75 times respectively . Matrix Partners notched up two successful exits in the period -selling stakes in online gaming firm (for 22x) and payments firm Itz Cash (for 3.19x).
“As VCs we invest with the aim and expectation of building lasting companies -and it often takes 6-9 years to build a company . A path to $1M, $10M and $25M in revenues coupled with profitable unit economics, and strong growth, are what we look for at Prime, even when we invest at the seed stage. Companies that hit these milestones will have strong exit outcomes -whether trade sale or IPO,“ said Sanjay Swamy , managing partner, Prime Venture Partners.
The better VC exits this year happened through either strategic sale or secondary sale (i.e. acquisition by a new financial investor). This year has also seen buyers from across the globe including China (Alibaba and Bytedance); Japan (SoftBank); Europe (including London, UK-headquartered Dentsu Aegis Network), US (Ebix)) and Canada (PE firm Clairvest ).

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