SAIF Packs $400m as it Flies Out of MakeMyTrip

Among the on­line travel agency’s pre-IPO VC back­ers, SAIF was the first to in­vest and is last to exit

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Ben­galuru: SAIF Part­ners has sold its en­tire re­main­ing stake in MakeMyTrip, con­clud­ing a se­ries of trans­ac­tions that are es­ti­mated to have fetched it the largest cash exit in In­dia’s ven­ture cap­i­tal in­dus­try.

The in­vest­ment firm has since Oc­to­ber shed its bal­ance11% hold­ing in In­dia’s largest on­line travel agency as the Nas­daq-listed com­pany’s stock price surged by over 50% fol­low­ing its merger with the Ibibo Group that month. SAIF Part­ners’s funds now hold zero shares in Makemytrip, ac­cord­ing to the travel agency’s fil­ings with the US Se­cu­ri­ties and Ex­change Com­mis­sion.

Over­all, SAIF is es­ti­mated to have earned more than $400 mil­lion on its in­vest­ments in the Gu­ru­gram-based com­pany, reap­ing 16 times the money it put in, based on reg­u­la­tory fil­ings and as­sess­ments by two peo­ple fa­mil­iar with the trans­ac­tions. The ven­ture cap­i­tal firm had in­vested about $25 mil­lion in MakeMyTrip be­tween 2005 and 2008 and owned about 41% stake in the com­pany when it de­buted on Nas­daq in 2010.

An in­vest­ment exit as re­ward­ing as this is a rare feat. Ven­ture cap­i­tal firms in In­dia are find­ing it tough to gen­er­ate cash from their in­vest­ments as only a hand­ful of port­fo­lio com­pa­nies have opted for ini­tial pub­lic of­fer­ings of their shares, a highly pre­ferred exit route for in­vestors. While there have been a spate of ac­qui­si­tions in re­cent years, most of these were struc­tured as pri­mar­ily stock deals. Among MakeMyTrip’s pre-IPO ven­ture cap­i­tal-back­ers, SAIF was the first to in­vest and is the last to exit. “You need to be su­per-pa­tient to get re­turns in In­dia. For a sig­nif­i­cant pe­riod, the MakeMyTrip stock was be-


low its IPO price,” said Rutvik Doshi, di­rec­tor at ven­ture cap­i­tal firm In­ven­tus. While SAIF has been sell­ing its MakeMyTrip stock, mu­tual funds and hedge funds in­clud­ing Wasatch Ad­vi­sors, Cap­i­tal World In­vestors, Janus Cap­i­tal and Ruane, Cun­niff & Gold­farb have been buy­ing into the com­pany.

SAIF man­ag­ing part­ner Ravi Adusumalli did not re­ply to emails see- king de­tails on the MakeMyTrip stake sales.

Ex­its for ven­ture-backed com­pa­nies added up to $1.5 bil­lion across 64 deals in 2016, as com­pared to $1.56 bil­lion across 66 deals in 2015, show data from Ven­ture In­tel­li­gence. To­tal in­vest­ments added up to $2.2 bil­lion last year, down from $4.9 bil­lion in 2015.

The exit chal­lenge for in­vestors also comes at a time when the val­u­a­tions of In­dia’s largest in­ter­net com­pa­nies face in­creas­ing pres­sure. Many ven­ture cap­i­tal firms were not able to cash in on the val­u­a­tion boom of 2014 and 2015, when global late-stage in­vestors rushed to the do­mes­tic mar­ket.

Also, sev­eral ven­ture cap­i­tal are ex­plor­ing bulk sales of their stake hold­ings in port­fo­lio com­pa­nies as their maiden funds ap­proach the ends of the 10-year life­cy­cles. Se­quoia Cap­i­tal In­dia and Kalaari Cap­i­tal have launched such pro­cesses, ET re­ported on De­cem­ber16.

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