Debjyoti Roy

Mid-market private equity firm Lighthouse Funds, which counts Fabindia, Duroflex and Wow! Momo among its portfolio firms, has backed a contract manufacturer focussed on food and beverages space in its latest transaction that is also its biggest bet till date. 

Lighthouse, along with some of its limited partners (LPs), has invested Rs 700 crore ($83 million) in Parsons Nutritionals Pvt Ltd, which serves several Indian and global FMCG companies operating in the country. 

The deal was stuck at a valuation based on nearly 20x EBITDA multiple, as per individuals tracking the Delhi-based firm. The company's listed peer Hindustan Foods (HFL) is currently valued at nearly 25x EBITDA based on its FY24 financials. HFL is the vendor that makes PepsiCo Inc’s Kurkure snack brand. 

Parsons’ EBITDA is likely to be around Rs 190-200 crore in FY24, the individuals mentioned above said. This means the company may have commanded a valuation of Rs 3,800 crore-4,000 crore ($455-479 million), as per VCCircle estimates.  

Parsons’ revenue growth is believed to have been a modest 7-10% in the year ended March 2024 due to muted volume, but is expected to spike in the current year and later as additional capacity becomes operational for manufacturing of soaps and shampoo for Hindustan Unilever Ltd, India's biggest FMCG company. 

The US-based private equity firm TA Associates had previously emerged as frontrunner to clinch the deal but a valuation mismatch had turned the talks sour, the individuals added. An email query sent to TA Associates remained unanswered till the time of writing this article. 

The.round saw co-investment from International Finance Corporation (IFC), the private-sector investment arm of World Bank Group, as well as Evolvence India, HDFC AMC's Fund of Funds, and leading family offices. 

Founded in 2002 by former Nestle executive Sukhbir Singh Mann, Parsons manufactures packaged food and beverages such as cookies, biscuits, chocolates and confectionery, malted beverages, and ready-drink mixes. It has recently forayed into manufacturing personal care categories such as shampoos and soaps. 

"As we continue to evolve as an institution, it was the right time to have a partner in Lighthouse on our next journey of growth. Their long-term vision and familial values perfectly match the DNA we have at Parsons," said Mann. 

The company operates multiple manufacturing facilities across five states, strategically located with pan-India coverage and the first external fundraise would enable the firm to expand its capacities in existing and newer product categories. 

"With years of manufacturing excellence underpinned by a strong focus on product quality, operational efficiency and distributed manufacturing, Parsons is uniquely positioned to benefit from the macro tailwind of increased consumption and outsourcing trends," said Sachin Bhartiya, Co-Founder and Partner of Lighthouse Funds, 

“This investment fits well into our long-term thesis of consumer products getting more organized, more branded, and more premium.” 

The firm had posted net sales of Rs 739 crore in FY23, up from Rs 509 crore a year before. The company's EBITDA rose to Rs 133 crore in FY23 from Rs 80 crore in FY22, as per VCCEdge. 

Lighthouse, which is in the middle of raising its fourth domestic fund, was founded in 2006 by Bhartiya, Sean Sovak and Mukund Krishnaswami. 

The mid-market consumer-focused PE firm had earlier raised about $500 million through its previous funds. It has invested in over 25 companies across food, lifestyle, home improvement, and healthcare sectors.   

Some of its other bets this year include fashion jewellery brand Kushal's and luggage maker Safari Industries. 

Besides Fabindia and Wow! Momo, some of its investments include online beauty and personal care retailer Nykaa, cosmetics and beauty brand Kama Ayurveda, snack brand Bikaji, and footwear brand Aqualite. 

Mid-market private equity firm Lighthouse Funds, which counts Fabindia, Duroflex and Wow! Momo among its portfolio ......

How Lighthouse PE valued Nestle veteran\'s FMCG firm in its biggest bet yet

Consumer

Malvika Maloo

Speciality coffee brand Subko, real estate management platform Aeria, logistics startup JustDeliveries, footwear company Kaarigar Mandi and crypto platform Nomoex Global have secured early-stage funding from a bunch of investors including stock broking firm Zerodha’s co-founder Nikhil Kamath and venture capital firm Kalaari Capital.  

Subko  

Speciality coffee brand Subko has raised $10 million (about Rs 83 crore) led by Kamath. Blume Founders Fund, The Gauri Khan Family Trust, Priya & John Abraham, Sangita Jindal, Srinivas & Pallavi Dempo, and The Mehta International Mauritius Limited Group also participated in the round, the company said Monday. 

The round valued Subko, led by founder Rahul Reddy, around $34 million post-money.  

Subko plans to use the capital to funds to improve its talent pool, its tech, product and design R&D. It will also improve farm level infrastructure for specialty green coffee and fine cacao beans, launch new 'ready to drink' coffee products and expand its cafes in different cities in the country and abroad.  

“We are committed to facilitating the careful, calibrated and quality-first expansion of Subko's unique craft café experiences to select Indian cities and potentially to global capitals, showcasing South Asian craftsmanship and the might of the region’s agricultural raw material,” said Reddy, who is also CEO and creative director of Subko.  

Aeria  

Aeria, a platform for commercial real estate to elevate tenant experience, has secured $1.8 million in pre-seed funding led by Kalaari Capital and construction-focused investment firm Foundamental, with participation from AC Ventures, AL Trust and several angel investors.  

The company will use the capital to expand its presence across Southeast Asia, Middle East and other Asian countries over the next year.  

Started by former co-founder of OxfordCaps Priyanka Gera and IIM alum Piyush Kateja, Aeria uses artificial intelligence to improve tenant experience for commercial real-estate, connecting employees, spaces, AM teams, property managers and service vendors.  

“Most owners currently rely on traditional methods to manage facilities and tenants. We aim to use technology to transform this experience and bring in efficiency to the owner’s operations,” said Priyanka Gera, Founder and CEO at Aeria.  

JustDeliveries  

JustDeliveries, which provides logistics solutions for perishables, has raised $1 million in a pre-Series A funding round led by National Bank for Agriculture and Rural Development’s NABVENTURES.  

FAAD Network, Anay Ventures, Caret Capital, and Mahansaria Family Office also participated in the round.  

The company plans to use the capital to deepen its logistics networks across key cities including Bangalore, Mumbai, Pune, NCR, and launch operations in Hyderabad.  

Founded in March 2022 by Mansi Mahansaria, the company specialises in organising logistics for F&B brands, prioritising the integration of technology to improve visibility and transparency in the supply chain. It partners with fast-food restaurants, café chains, and brands specialising in fresh and frozen products to provide delivery of perishable products. 

J.R. Laddha Financial Services acted as the exclusive advisor for the deal.

Kaarigar Mandi  

Kaarigar Mandi, a business-to-business footwear startup, has raised Rs 1.75 crore in seed funding led by Kyt Ventures. Upaya Social Ventures, IIMA Ventures, and IIM Calcutta Innovation Park also participated in the round.  

The startup plans to use the capital towards business development and improving its technology infrastructure.  

The startup, founded by Ankit Kumar, Gagan Mukhi, and Hifza Afaq, the startup initially as a direct-to-consumer and business-to-consumer model in 2019. It later pivoted to a B2B model in August 2021.  

"Our platform is designed to bridge the gap between traditional artisans and modern bulk buyers," says Kumar. "With this funding, we aim to further strengthen our infrastructure and expand our reach, creating a thriving ecosystem for footwear businesses and fostering economic resilience."  

Nomoex Global  

Crypto exchange platform Nomoex Global has raised $2 million in funding, led by Aydton Ventures, founder and chief executive Abhishek Mahto said in a post on LinkedIn on Monday.  

“This funding will fuel our mission to bring you even more innovative features, enhanced security, and seamless trading experiences,” said Mahto.  

The company, founded in 2022, offers a centralised exchange for digital assets and cryptocurrencies, allowing people to buy, sell and trade cryptocurrencies. It previously raised $35,000 in seed funding. 

Speciality coffee brand Subko, real estate management platform Aeria, logistics startup JustDeliveries, footwear company......

Zerodha’s Nikhil Kamath, Kalaari Capital, NABVENTURES make startup bets

K Amoghavarsha

Artificial intelligence platform SiftHub, adventure sport programmes provider Rocksport, software-as-a-service (SaaS) startup Vodex, agritech startup Ono, cloud security startup Arch0 and healthtech startup Mave Health secured early-stage funding, the companies said on Tuesday.  

SiftHub  

SiftHub raised $5.5 million (Rs 46 crore) in a seed funding round co-led by Matrix Partners India and Blume Ventures. 

The round also saw participation from Neon Fund as well as angel investors Harshil Mathur and Shashank Kumar (RazorPay), Arvind Parthiban (SuperOps), Manish Jindal (ex-Cloudflare), and Andrew Johnston (Superhuman).  

Founded by Manisha Raisinghani, SiftHub is an AI platform that acts as a central hub to collate and sift through content scattered across multiple repositories and tools. It allows sales and pre-sales teams to improve win rates and close deals faster.   

The startup is headquartered in the United States and has an R&D office in Mumbai, India.  

“By integrating GenAI with workflow automation and collaborative capabilities, we’re providing an end-to-end solution for our users. From the moment the first information request is received to the closure of each sale with satisfactory responses, SiftHub will remain a trusted partner for sales organisations,” said Raisinghani.   

Rocksport 

Adventure sports programmes provider Rocksport has closed its Series A funding round at $3 million (Rs 25 crore) as it secured funding from Brand Capital, the strategic investment arm of The Times of India.   

In 2020, the company secured Rs 3 crore from Mahindra Holidays & Resorts.  

After the fresh infusion, the startup is valued at $30 million, according to the company’s statement.  

“The funds acquired through this agreement will primarily finance advertising and brand-building initiatives aimed at introducing customers to Rocksport and its offerings,” said Amit Goyal, chief executive officer, Rocksport.  

Rocksport offers activities like adventure picnics and camping night-outs at its urban facilities. Additionally, it hosts themed adventure experiences at partner resorts and entertainment destinations. The company also organizes curated group tours to adventurous and offbeat holiday spots.  

Vodex  

Generative AI-based SaaS startup Vodex has raised $2 million (Rs 16.7 crore) in a seed funding round from Unicorn India Ventures and Pentathlon Ventures.   

The funds raised will be used to expand presence across geographies as well as for hiring, the company said in its statement.  

Founded by Anshul Shrivastava and Kumar Saurav, Vodex is a sales and outbound calling solution based on generative AI. It uses generative AI to help businesses with pre-sales and tele-calling operations, optimizing sales, marketing, scheduling, lead generation, and feedback-calling services.    

“Vodex will invest in building a support team. We are confident of quadrupling our revenue in the near future,” said Shrivastava, co-founder and chief executive officer, Vodex.  

In 2023, the startup raised $320,000 (Rs 2.6 crore) in a pre-seed funding round led by 100X.VC. The round also saw participation from angel investors Yash Kotak, Ram Kumar and Devansh Alijar.    

Ono    

Ono has raised $1.3 million (Rs 11 crore) in a seed funding round led by Aeravti Ventures. The round also saw participation from Indigram Labs.  

Founded by Rama Rao Kancharapu, Ono is an agritech startup that has developed a data-first digitization platform to address pain points within the agricultural ecosystem, including access to formal credit, price intelligence, market discovery, and operational inefficiencies.  

The startup operates across six states in 45 agricultural produce market committees (APMC) or mandis with over 30,000 partners onboarded and transactions in seven commodities.  

Meanwhile, early-stage venture capital firm Aeravti Ventures marked the first close for its maiden fund in 2023. The fund aims to mark the final close of its Rs 100 crore fund in the next three months, the partners Rishabh Singh and Shubham Jhuria said in an interaction with VCCircle.  

Arch0  

Arch0 has raised $1.25 million (Rs 10.4 crore) in a pre-seed funding round led by Leo Capital. The round also saw participation from Village Global, Indian Silicon Valley Capital, Appreciate Capital, SuperMorpheus, and undisclosed angel investors.  

The startup will use the funding for research and development (R&D), hiring talent and strengthening its marketing and educational initiatives, according to its statement.  

Founded in 2022 by Nithin Jois and Tilak Thimmappa, Arch0 is a platform that centralises on identity and puts together insights from every phase of the cloud journey — from code development through to operations, resource deployments, and data access, to allow teams to identify, prioritise, and address security threats.   

“We are shifting from static daily dashboards to providing dynamic, real-time insights accessible anytime, wherever users are. Our proprietary AI-powered solution provides an immediate understanding of the 'who, what, when, where, and how' of each security incident, ensuring issues are addressed before they escalate,” said Jois, co-founder and chief executive officer, Arch0.  

Mave Health  

Mave Health has raised $719,202 (Rs 6 crore) in a pre-seed funding round co-led by All-In Capital and Utsav Somani’s iSeed Fund. 

The round also saw participation from Bharat Founders Fund and angel investors Deepinder Goyal (Zomato), Kunal Shah (CRED), Mohit Kumar and Vatsal Singhal (Ultrahuman), Gaurav Agarwal (TATA 1mg), Nandan Reddy (Swiggy), Rohan Verma (BreatheWellBeing), Nikhil Kant (Even), Harsh Shah (Fynd), Neel Mehta (Studio Carbon), Nitin Mehrotra (Dressfolk), Himanshu Aggarwal (SHL), along with Vikrampati Singhania from JK Family Office, Gaurang Patel and Pradeep Patel from Amaanta Family office and Rajan Dube.   

The investment will support Mave Health in launching Arc, its non-invasive brain stimulation wearable that treats depression.  

Founded by Dhawal Jain, Mave Health is a mental health startup using neurotechnology to treat depression. Their wearable product, Arc, is a non-invasive brain stimulation device that treats depression.  

Software-as-a-service (SaaS) startup Vodex, agritech startup Ono, cloud security startup Arch0 and healthtech startup ......

SiftHub, Vodex, four others secure early-stage funding

Reuters

India's economy and stock markets are booming, but its startups are not.

Investors, once eager to pump in billions of dollars in promising Indian tech ventures, are now going slow and cutting smaller cheques. They've been burnt by ignominious falls from grace - and valuations - for once-marquee young firms or market debutants of recent years such as digital payments company Paytm.

Karthik Reddy, managing partner at India's Blume Ventures, which has invested in hundreds of early-stage startups, said his firm plans to do about eight new deals this year compared with 12 last year. It will invest bigger sums in firms it is confident about instead of spreading funds across more companies.

"When your existing portfolio is not showing gains, it is hard to be excited to do more," he told Reuters.

Investors looking at Indian startups are much more focused on potential profitability, less enamoured with tech companies and more interested in stable brick-and-mortar businesses, according to Reuters interviews with six executives at foreign and domestic investment firms as well as two CEOs at startups.

In January and February, India's startups raised about $900 million - a pace that signals another slow year after a six-year low of just $8 billion in 2023, Venture Intelligence data shows.

That's a far cry from the record $36 billion raised in 2021 or even the $24 billion in 2022. In contrast, India's stock market - spurred on by 8%-plus economic growth- has surged 19% since the beginning of last year, hitting a record high this month.

The two-thirds drop in funding last year for Indian startups was also much steeper than the 36% drop for U.S. startups and the 42% drop for Chinese startups, CBInsights data shows.

Significantly, Blume's next fund is set to be either equal in size or smaller than its last one which raised $290 million - an unusual development for a top Indian venture capital firm.

India's 10 biggest venture capital firms have over the past decade always embarked on bigger funds than their last one, a Reuters analysis shows.

"In this environment. I don't think we can make big returns with more money," Reddy said.

Lucky is not a business model

Less startup funding can have a broader economic impact. In the last eight years, startups generated 20-25% of India's new jobs and 10-15% of its economic growth, an Indian trade body and McKinsey said in a report this month.

Much of the blame for investors' relative reticence towards startups - described by Prime Minister Narendra Modi as the "backbone" of the country - can be laid at the sharp turnarounds in fortune for Paytm, online educational firm Byju's and Uber-rival Ola Cabs.

Paytm's shares have plunged 80% since its 2021 listing. It was criticised at the time for valuing itself too high and is now in crisis after the central bank ordered its banking arm wound down for persistent non-compliance.

Byju's, once the poster child for India's startup ecosystem, was valued at $22 billion in 2022 but now values itself at around $200 million. It's at loggerheads with investors over a rights issue and cannot pay its staff.

In some cases, valuations have plunged even without a major crisis. Vanguard, an investor in Ola Cabs, slashed the ride-hailing firm's valuation to $1.9 billion, a drop of 74% from 2021, although it did not give a reason.

Ashish Sharma, chief executive at Temasek-backed InnoVen Capital which has invested $1.5 billion in Asian startups, said it was clear with hindsight that too much capital was poured into some sectors, leading to sharp increases in valuations.

"Some companies got lucky ... (but) getting lucky cannot be a business model."

"One change is that we need to be more cautious when evaluating high growth/ high (cash) burn businesses and assess if the assessable market is large enough that it can attract growth investors to raise the next round of capital," he added.

India's Nexus Venture Partners, which manages $2 billion, is "broad-basing" its bets beyond typical tech startups to capture a larger portion of the economy and because traditional sectors are less risky, according to a source with direct knowledge of the matter who declined to be identified.

Nexus, which has since December backed a sportswear manufacturer and a coffee chain, did not respond to a request for comment.

In one brighter sign, Japan's SoftBank is considering deploying up to $300 million in India this year, according to a source briefed on its plans.

That comes after not signing a single new cheque in India in two years - a sharper pullback than in other regions by the tech investment behemoth.

"Most (Indian) startups were too richly valued and SoftBank could not justify those valuations," said the source who was not authorised to speak to media and declined to be identified.

SoftBank, which invested $11 billion in Indian startups between 2014 and 2021, did not respond to Reuters requests for comment.

India's economy and stock markets are booming, but its startups are not.

Investors, once eager to pump in ......

Investors jittery as some Indian startups\' fall from grace dwindles faith 

Global consumer-focused private equity firm L Catterton, which counts Sugar Cosmetics, Reliance Jio and Fabindia in its portfolio, has launched an India-centric investment platform and roped in a former Unilever executive to lead the new vehicle's activities in the country. 

L Catterton, which was so far placing bets in India through its Asia fund, has roped in Sanjiv Mehta, who was previously CEO and managing director at Hindustan Unilever Ltd for nearly a decade, to deepen its commitments to India. 

Mehta, who worked with Unilever Group more than three decades, will serve as the new vehicle's executive chairman, which would come into effect from April 4, L Catterton said. 

The PE firm didn’t disclose the size of the vehicle or any other details. However, VCCircle has learnt that the sidecar vehicle may look at deal sizes typically spanning $25 million to $150 million. 

The new fund will deploy its corpus in a coordinated manner with L Catterton’s pan-Asia fund.  

"With L Catterton’s global reach, investing expertise in the consumer sector, and familiarity with the region, all augmented by its strategic partnership with LVMH and the Arnault family office, the firm is very well positioned to succeed," said Mehta on his new role.  

During his stint with HUL, Mehta oversaw a fivefold increase in the company’s market capitalisation to Rs 6.2 trillion (nearly $76 billion), making it India’s fifth-largest public company by market value and the largest fast-moving consumer goods company. He previously held various other senior leadership positions at Unilever.  

Mehta is a non-executive independent director at Danone, Air India, and Dr. Reddy's Laboratories. He is also the president commissioner of Unilever Indonesia PT and sits on the South Asia Advisory Board of Harvard Business School. He was the president of the Federation of Indian Chambers of Commerce and Industry from 2021 to 2022.  

"With India now having the world’s largest population and generating high GDP growth, there has never been a better time to deepen our commitment to the market and invest in the consumer businesses that will shape the landscape of tomorrow,” said L Catterton global co-CEO Michael Chu.  

L Catterton's India head Anjana Sasidharan said the partnership with Mehta will deepen the firm’s in-market network, insights, and capabilities and that the firm intended to grow its franchise in India and throughout Asia. 

Launched in 1989, L Catterton is backed by Paris-based luxury brand LVMH Moet Hennessy Louis Vuitton. The investment firm has assets under management of $35 billion spread across private equity, credit, and real estate.  

The firm has struck about 275 consumer-centric investments. Some of its well-known bets in India include pet care brand Drools, Future Lifestyle Fashion and Genesis Luxury, among others.  

Global consumer-focused private equity firm L Catterton, which counts Sugar Cosmetics, Reliance Jio and Fabindia in its ......

L Catterton rolls out India-centric platform, ropes in FMCG veteran

Sreeja Biswas

Healthcare-focussed venture capital firm HealthQuad, which has backed companies such as diagnostics service provider Redcliffe; mental health platform Wysa and medical imagining diagnostics firm qure.ai, has bagged benchmark returns after exiting an eight-year-old investment, VCCircle has learnt. 
 
The homegrown VC firm - started by founders of private equity firm Quadria Capital, Amit Varma and Abrar Mir along with impact investment firm KOIS, has sold its entire 4.63% stake in Asian Institute of Nephrology and Urology (AINU), India’s largest single-specialty hospital network dedicated to urology and nephrology care.

The exit came as part of a majority acquisition of AINU for Rs 600 crore, by Asian Healthcare Holdings, a single-specialty healthcare investment platform backed by TPG Growth and GIC. 
 
This marks the fourth exit for HealthQuad’s maiden venture capital fund worth Rs 75 crore, with a 4x return. Although firm’s initial investment in AINU couldn’t be ascertained, its maiden fund’s ticket size ranges between Rs 1-15 crore.   
 
“So far, our exits have returned 3x the capital to investors, with an internal rate of return (IRR) for AINU slightly over 20%,” people aware of the development told VCCircle.

HealthQuad’s initial fund included a balance of five investments in new-age companies and two in standard brick-and-mortar healthcare assets for portfolio diversification and capital protection, sources said further adding that the VC firm will fully exit the fund I within the next 12 to 18 months.
 
The move follows the New Delhi-based VC firm’s previous exit from multi-speciality hospital group Regency Health, which also generated a similar IRR.

Venture capital and private equity firms typically chase 20-30% IRR in rupee terms at the fund level.

HealthQuad has invested in Medikabazaar, THB, Neurosynaptic Communications, Hi-impact Consultants, Regency Health, Strand Lifesciences, and AINU from its maiden fund.

It previously exited Strand Life Sciences and made a partial exit from Medikabazaar.

These exits comes as the VC firm is said to be considering raising its third fund. News website DealStreet Asia reported late last year that HealthQuad could aim for $300 million for the planned fund.

HealthQuad, which manages more than $200 million across two funds, is currently investing out of its second fund, a much larger one with a corpus of $162 million.

Established in 2013 by C Mallikarjuna and PC Reddy, AINU specialises in urology and nephrology services. Operating across seven hospitals with a total of 500 beds, AINU has treated over 400,000 patients and conducted 50,000 procedures. Initially starting in Hyderabad, AINU has expanded to Chennai, Siliguri and Vishakhapatnam. During this expansion, its bed capacity has increased fivefold, alongside a remarkable 200% rise in patient volume.

Healthcare-focussed venture capital firm HealthQuad, which has backed companies such as diagnostics service provider ......

Did HealthQuad meet exit benchmark from eight-year-old bet?

Healthcare

Healthcare Services

Mumbai-based Stirrup Communications Pvt Ltd, which operates the eponymous communications consultancy firm specialising in environmental, social and governance (ESG) communications, has got an offshore strategic buyer for itself.   

The company, which also works in the areas of corporate reporting, branding and corporate digital services, has secured investment from governance, risk and compliance (GRC) and environmental, social and governance (ESG) platform Xcelerate Pte Ltd.   

The deal is said to be in the range of Rs 150-200 crore, while the size of the stake was not disclosed.  

The acquisition is in line with Xcelerate’s roll-up strategy to bring together management teams, technologies and domain experts to offer solutions on a regional basis in the GRC and ESG segments.  

Its first platform acquisition was Aparajitha Corporate Services Pvt. Ltd in India. Aparajitha provides compliance services to approximately 2,000 large enterprise clients.   

Post the investment by Xcelerate, Aparajitha undertook the acquisition of the business of Comply India, a majority stake in Simpliance Technologies and recently announced an agreement to acquire the labour law compliance services business of Allsec Technologies Ltd.  

Stirrup was promoted and led by Arvind Agrawal. The firm has catered to over 500 clients, with the client mix dominated by Nifty 50 Indian companies and some international corporates. It primarily caters to the ESG communications and advisory needs within the Indian ecosystem.  

As part of the transaction, K.V. Ramakrishna, former CEO of Kotak Private Equity and advisor at multiple companies, and Kv Ramanand, the chief executive officer of Xcelerate Group’s India arm will join the Board of Directors of Stirrup, while Agrawal, will continue to lead the company as the managing director and chief executive officer.   

Xcelerate, which was founded in 2021 is also planning to expand into APAC and other markets shortly.   

The Singapore-headquartered firm had raised fresh funding from legacy wealth management firm Federated Hermes PE along with its existing investors Altair Capital and Exacta Capital Partners and Xcelerate’s co-founders in February 2024. 

Mumbai-based Stirrup Communications Pvt Ltd, which operates the eponymous communications consultancy firm specialising ......

Homegrown consultancy Stirrup Communications gets strategic buyer

General

Mumbai-listed consumer goods major ITC Ltd and US-based food giant and breakfast cereal maker Kellogg's are among a string of suitors looking to pick up a stake in an Indian healthy snacks brand, two people aware of the development told VCCircle. 

The two companies are considering making an investment in Greek yogurt brand Epigamia, which is operated by Drums Food international Pvt Ltd, one of the persons said, asking not to be identified. 

The planned transaction could even see one of the company's backers, Belgian private investment firm Verlinvest, diluting a part of its stake.  

The transaction is likely to value the company at around $150 million (Rs 1,252 crore). However, the talks are at an early stage and terms of the deal may vary in future, the person added.  

Investment bank Investec is helping to scout for potential investors, the second person said. 

To be clear, Kellogg's hived off its North American cereal business into a standalone new entity in October 2023. The remaining company, as it is now, offers faster-growing packaged snacks like Pringles and is rebranded under Kellanova. It couldn't be immediately ascertained which of the two entities under the iconic FMCG name is evaluating picking up a stake in Epigamia’s parent.  

An ITC spokesperson declined to comment. Email queries sent to Epigamia parent, Verlinvest, and to Kellogg's as well as its spinoff remained unanswered till the time of writing this article.  

This is the second instance of ITC and Kellogg’s evaluating an investment in an Indian company. In February, VCCircle reported that these two were among a bunch of suitors in the race to pick up a controlling stake in healthy snacks firm Rite Bite.   

Epigamia was launched in 2015 by Rohan Mirchandani, Uday Thakker, Ganesh Krishnamoorthy, and Rahul Jain. The brand kicked off with its Greek yogurt. The company later entered other categories including smoothies, protein drinks, and desserts.  

Besides Verlinvest, the company counts DSG Consumer Partners, Danone's venture arm Manifesto Ventures, and US-based investment firm Mousse Partners as its investors. Bollywood actor Deepika Padukone had also backed the company in 2019.  

The company posted net sales of Rs 168 crore during FY23, up from Rs 135 crore the year before, as per VCCEdge, the data research arm of VCCircle. It recorded a net loss of Rs 67 crore for FY23, compared with a loss of Rs 59.5 crore the previous year. 

India’s health and nutrition category has seen quite a few deals in the recent past. In July 2023, for instance, VCCircle reported that a company led by Samit Mehta, executive director at Emcure Pharma, acquired HealthXP, an online nutrition and sports supplement brand. In December 2022, Hindustan Unilever invested in Zywie Ventures, which sells plant-based supplement brand Oziva. HUL also backed Nutritionalab.  

Mumbai-listed consumer goods major ITC Ltd and US-based food giant and breakfast cereal maker Kellogg's are among a ......

ITC, Kellogg\'s spinoff firm eye stake in another PE-backed healthy snacks brand

Priyal Mahtta

Confederation of Real Estate Developers’ Associations of India and Venture Catalysts-backed Spyre Proptech Fund has made a change in top management, VCCircle has learnt.  

The fund, focussed on backing early-to-growth stage tech-driven real estate startups, has appointed former investments and strategy head at the Kolte-Patil Group’s family office, Murali Krishna V, as a principal.  

Krishna headed the family office’s investments and strategy across tech startups, proptech ventures, debt products and strategic real estate investments for about four years until August last year.  

In a short stint, Krishna was also an independent director at Nasdaq-listed Blackwell 3D Construction Corp following his role at the family office.

“I have joined the Spyre Proptech Venture Fund team as a principal/lead. I am thrilled to contribute to this space and connect with industry professionals,” Krishna said in a LinkedIn post.  

The proptech-focussed fund, with a $100 million (about Rs 800 crore then) corpus, was launched in September 2022 as a partnership between Credai and startup incubator Venture Catalysts.   

Its mandate is to invest in early-to-growth stage proptech startups leveraging data analytics, blockchain, artificial intelligence and augmented reality. Proptech startups working in segments such as residential, commercial, institutional (hotels, schools, hospitals) and industrial (warehouses and factories) will be backed by the vehicle.  

While much is not known about the VC fund’s proptech bets since its launch, the sector has seen a significant capital inflow in the last year, according to a report. In the first half of 2023, investments in India’s proptech startups touched about $4 billion with co-living and co-working segments leading the race accounting for a 64% of the total inflows.

Confederation of Real Estate Developers’ Associations of India (CREDAI) and Venture Catalysts-backed Spyre Proptech ......

CREDAI-backed Spyre Fund appoints former Kolte-Patil family office exec

People

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Indian private equity firm ICICI Venture has made its second exit move of 2024 as it sold a big chunk of its stake in a company it originally backed a decade ago, fully exited in 2018 and then reinvested two-and-a-half years ago. 

The PE firm, which finished the fundraising process for its fifth investment vehicle last year, has divested three-fifths of its stake in Hyderabad-based Krishna Institute of Medical Sciences Ltd for Rs 223 crore ($26.9 million). It sold an estimated 1.33% stake in the company, which operates under the KIMS Hospitals brand. 

This is the second time that Mumbai-based ICICI Venture, the alternative investment arm of ICICI Bank, has monetised its investment in KIMS Hospitals. 

The PE firm first invested about Rs 220 crore in KIMS Hospitals in June 2014 from its third fund. A few months later it put in roughly Rs 20 crore more, according to VCCEdge, the data research arm of VCCircle. This took the total to around Rs 240 crore. It sold its stake to General Atlantic in 2018. In total, General Atlantic invested $130 million (Rs 890 crore) for a significant minority stake in the healthcare company through a mixture of primary and secondary transactions. 

VCCircle reported at the time that ICICI Venture likely scored three-fold return on its initial investment after accounting for taxes and holdbacks. The PE firm likely received up to Rs 720 crore net of taxes and future receivables while KIMS Hospitals may have received a primary fund infusion of Rs 50 crore to Rs 100 crore. 

The PE firm registered a net internal rate of return (IRR)—or annualised return—of 35% on this investment, VCCircle reported. That’s higher than the 20-30% that PE firms typically chase in rupee terms. 

KIMS Hospitals floated its IPO in June 2021. Days before the IPO, General Atlantic sold a small stake in the company to ICICI Venture. General Atlantic went on to shed more than half its stake in the IPO and fully exited last year, exceeding the benchmark returns. 

Meanwhile, the Indian PE firm had invested Rs 160 crore in KIMS at the time via two entities under its fourth fund. It bought about 1.94 million shares, or about 2.3% stake, at Rs 825 apiece from the US-based PE firm.  

One of the two entities under the fourth fund invested about Rs 147 crore while the other contributed the remaining. This first entity has now sold the bulk of its stake for Rs 223 crore. Its remaining stake is worth about Rs 153 crore. The shareholding details of the second entity couldn’t be ascertained but the PE firm’s total remaining stake is likely to be around 1%. 

The PE firm likely scored a realised IRR of around 40% on its partial exit the second time around, VCCircle estimates show. That's not only above the industry benchmark but also higher than its performance when it first invested. 

ICICI Venture didn’t respond to a request for comment till the time of writing this article. 

This is ICICI Venture’s second exit move this year. Last month, it sold part of its stake in Epack Durable, a contract manufacturer for home appliances, through the company’s IPO and likely managed to record above-par returns. 

ICICI Venture is one of India’s oldest PE firms. It manages five funds with total assets under management of $1.85 billion. It raised about Rs 3,000 crore ($362 million), which included a green shoe of Rs 500 crore, for its fifth fund. 

The PE firm has invested in more than 60 companies since inception in various sectors such as banking and financial services, media and entertainment, food and quick service restaurants, healthcare, biopharmaceuticals, specialty chemicals, and branded apparel. Some of its investments include Go Fashions India, Theobroma Foods, Metropolis Health Services, and Bharat Biotech. 

KIMS Hospitals was set up in 2004 by Dr Bhaskar Rao, a cardiothoracic surgeon. It has 12 multi-specialty hospitals and a capacity of 4,000 beds in South India. In addition to providing core medical, surgical and emergency services, it provides advanced quaternary healthcare in various specialties under disciplines such as neurosciences, cardiac sciences, oncology, orthopaedics, renal sciences, organ transplantation and gastric sciences. 

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