Mayfield Fund, the US-based venture capital firm with over $2.8 billion under management, is likely to exit from an investment in India which it made in 2008.
According to sources familiar with the development, Mayfield will sell its stake in Hyderabad-based firm Servomax India Ltd, the power conditioning equipment manufacturer, back to the promoters. In 2008, Mayfield had invested $3.75 million in Servomax but the quantum of stake it holds in the firm is not known.
The Rs 125-crore Servomax, which counts Reliance, Bajaj Auto and Tata Telecom as some of its clients, makes voltage stabilizers, isolation transformers and power saving products.
When contacted, Nikhil Khattau, Managing Director, Mayfield, declined to comment. Mails sent to Venkateswara Rao, founder & CEO, Servomax Ltd. did not elicit any response.
Promoter buybacks is also one of the several routes for VC/PE exits from portfolio firms, apart from other channels such as secondary sales, IPOs or open market deals.
According to VCCEdge data, six exits have been made by PE firms through buyback deals in 2010. JBF Global Pte Ltd. bought back shares from Citi Venture Capital International Growth Fund in a $60-million deal. DLF Assets Ltd bought back shares from Symphony Capital Partners Ltd in a $695-million deal. Times Internet Ltd bought back stake from Sequoia Capital India while Siva Ventures Ltd sold shares back to Aamby Valley Ltd for $323 million. Orient Global Tamarind Fund Pte Ltd sold the stake back to India Infoline Marketing Services Ltd. and India Infoline Investment Services Pvt. Ltd. in seperate deal. Since 2003, about 27 buyback deals took place with a total announced deal size of $1.7 billion.
Till date, there were 19 exits made through open market since January 2010. Three were through secondary sales, while 5 exits were made through IPOs in 2010.
Mayfiled made its debut investment in India in 2007 with Tejas Networks, an optical networking products firm.
In March 2010, Mayfield India Fund, along with SIDBI Venture invested Rs 50 crore in Fourcee Infrastructure Equipment, a freight & logistics company. In 2008, Consim Info, formerly known as BharatMatrimony Group, has raised second round of funding of $11.75 million led by Mayfield Fund, along with existing investors, Yahoo and Canaan Partners.
In 2008, Mayfield invested $9 million in participation with other investors in mobile payment company PayMate India while Geodesic Techniques, a civil engineering company, had raised $11 million from Mayfield Fund. In the same year, Genesis Colors Pvt. Ltd, raised Rs 110 crore from Sequoia Capital Fund, Mayfield Fund and Silicon Valley Bank.