Tiger Global’s Big Flip­kart Bet is Fi­nally Pay­ing Off

In­dia’s most in­flu­en­tial tech in­vestor Lee Fixel could re­turn to the fray

The Economic Times - - Disruption: Startups & Tech - Mad­hav.Chan­chani @times­group.com

Bengaluru: In 2009, Tiger Global Man­age­ment’s Lee Fixel met MakeMyTrip founder Deep Kalra for din­ner at a well-known Bengaluru restau­rant, in a cel­e­bra­tory mood. The young in­vestor from the New York-based firm had just man­aged to close a much-con­tested deal in an on­line book store called Flip­kart, which he had set his eyes on.

It hadn’t been an easy task. Flip­kart’s founders, Sachin Bansal and Binny Bansal, had a plethora of in­vestor term sheets to choose from and showed no signs of hurry in de­cid­ing. So much so, that Fixel had to en­list Kalra — whose on­line travel por­tal MakeMyTrip Tiger Global had backed in 2007 — to help make con­tact with the two IIT-Delhi grad­u­ates. Flip­kart had re­ceived over half-a-dozen term sheets from var­i­ous ven­ture cap­i­tal in­vestors, mostly at a val­u­a­tion of around $20 mil­lion. But Fixel snagged the deal with a val­u­a­tion of over $30 mil­lion. Kalra re­calls Fixel telling him that if he was “right about this it doesn’t mat­ter if I own a quar­ter or a third of the com­pany”. Tiger Global had in that same year, in­vested in a Chi­nese startup called 360Buy, which is now known as JD.com and is cur­rently worth $65 bil­lion.

By 2015, Tiger Global’s in­vest­ment in Flip­kart had bal­looned to $1 bil­lion mak­ing it one of the firms’s largest and riski­est bets in ecom­merce. In the last 18 months, Fixel has worked hard to de­risk this in­vest­ment. And in re­cent months (he) has been ac­tive in bring­ing on board a set of new, deep-pock­eted strate­gic in­vestors to Flip­kart, in­clud­ing China’s Ten­cent and now SoftBank.

With SoftBank’s $2.5-bil­lion in­vest­ment in Flip­kart, Fixel is now ex­pected to reg­is­ter the big­gest exit for an in­vestor in the In­dian startup ecosys­tem — es­ti­mated at over $800 mil­lion. Tiger Global will be left with at least about 18% stake in Flip­kart af­ter the deal, which will be worth over $2 bil­lion, as per the post money val­u­a­tion of the com­pany. This par­tial exit, say in­dus- try watch­ers, could make Fixel more amenable to in­vest­ing anew in In­dia. Tiger Global — once the largest backer of In­dian star­tups with to­tal in­vest­ments of $2 bil­lion in some three-dozen com­pa­nies — has not made any new in­vest­ments in In­dia since the end of 2015.

That is set to change. Fixel has started meet­ing both new com­pa­nies and ex­ist­ing port­fo­lio com­pa­nies to lead new rounds of fund­ing, said two founders who have held dis­cus­sions with him. But ven­ture cap­i­tal in­vestors are of the view that Fixel is not likely to re­peat his ag­gres­sive in­vest­ment style of old, when the firm closed 18 new in­vest­ments in less than 12 months. “He will in­vest in a very con­trolled man­ner now, as In­dia has al­ready given him a few sleepless nights. He has to con­tinue to re­main con­nected to the mar­ket,” said one ven­ture cap­i­tal in­vestor.

The par­tial exit could make Fixel more amend­able to in­vest­ing anew in In­dia

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.