Roshan Abraham

Global macroeconomic uncertainty, geopolitical risks and liquidity pressures could hamper deployment of capital by institutional investors, highlighted panellists at VCCircle Limited Partners Summit 2026 in Mumbai. 

The discussion revolved around capital allocation by institutional LPs such as fund of funds and pension funds. The experts on the panel were: Rohit Bhayana, Oister Global founder and managing partner; Saravana Kumar, director and CEO at NSIC Venture Capital Fund; Sandeep Pandey, CIO of fixed income at SBI Pension Funds; and Dominic Goh, managing director at HarbourVest Partners. 

Goh said that a shift in capital allocation to or away from the US market or the dollar, considering high global market volatility, could significantly affect other markets.

“I would be remiss not to say that institutional investors are thinking about this risk. If the question is, ‘Could this come as a surprise?’ I think it's a non-zero possibility,” he said. 

“To be clear, it’s not something that is front and centre in conversations happening today. But I do think it’s something that will or has started to register in the LPs' minds regarding what happens there,” Goh added.

Pandey said he doesn’t perceive a risk to institutional flows from SBI Pension Funds’ viewpoint because they are structural in nature and necessary for both private and public growth. However, he noted that global geopolitical risks could impact all markets.

Kumar, who heads the Self Reliant India (SRI) Fund at NSIC, noted two key challenges to capital allocation. The first issue, he said, is funds projecting high asset mobilization but failing to meet or mobilize the promised money. This sets back the fund's budgetary allocation.

The second problem was friction between alternative investment funds (AIFs) and promoters, which resulted in the closure of the investee company, he said. 

According to Bhayana, liquidity was a constraint in structured products and a huge risk in private markets. He urged incorporating liquidity as a structural necessity built into every product design and fund environment.

“If liquidity faces a crunch in an already illiquid, long-tenure product, it’s a cataclysm... it drives emotions and confidence extremely low.”

Global macroeconomic uncertainty, geopolitical risks and liquidity pressures could hamper deployment of capital by ......

Institutional capital deployment faces macro, liquidity risks: Investors at VCCircle LP Summit

Finance

Animal healthcare-focused company Zenex Animal Health India Pvt Ltd, which is gearing up for a stock market debut, has struck a deal to acquire a Netherlands-based animal nutrition company.

The acquisition marks Multiples PE-backed Zenex's expansion into the market for natural animal nutrition and setting up a dedicated manufacturing and sales hub in Western Europe, according to a statement. 

Zenex said on Friday it has picked up a majority stake in Enter, Netherlands-headquartered VievePharm. The company didn't divulge the terms of the transaction. 

VievePharm specialises in natural animal nutrition with its phytogenic formulations - or compounds derived from herbs, spices and other plants -  for the livestock, equine, and pet care markets. Its manufacturing facility supports more than 60 customers across over 25 countries throughout Europe and other international markets.

The acquisition of VievePharm will strengthen Zenex's naturals portfolio and build on its Ayurvedic portfolio obtained through the acquisition of Ayurvet in 2023. 

Zenex noted that the EU's "Farm to Fork" strategy, which sets a target to cut veterinary antibiotic sales by 50% by 2030, will act as a strong tailwind to the combined portfolio.

The acquisition also helps Zenex expand into the Western European market in addition to its footprint in Asia, Africa, and parts of the CIS region, allowing the company to use 

VievePharm’s distribution network in the EU to accelerate the export of its broader therapeutic and nutritional range across multiple formulation types such as powders and liquids.

"By combining VievePharm’s advanced bolus technology and European market access with our R&D depth and global distribution, we are positioned to offer holistic, science-backed solutions that address the root causes of animal health challenges," said Arun Atrey, managing director and CEO of Zenex Animal Health. 

PwC advised Zenex on financial diligence and transaction structuring. Cyril Amarchand Mangaldas and Norton Rose Fullbright acted as the domestic and international legal counsel respectively, for Zenex.

Zenex was formed after the Multiples Alternate Asset Management led a consortium of investors to acquire Zydus Cadila's animal health division in 2021. Multiples PE teamed up with Canada Pension Plan Investment Board (CPPIB), the Jhunjhunwala family’s RARE Enterprises and other investors to acquire Cadila's animal health business for up to Rs 2,921 crore. However, the investors likely ended up investing around Rs 2,505 crore, regulatory disclosures show.

VCCircle reported late last year that Zenex kickstarted its plan to go public after the PE fund in early 2025 started an informal process for a secondary stake sale. However, the company is still six to seven months away from filing its draft red herring prospectus (DRHP), the report noted.

Animal healthcare-focused company Zenex Animal Health India Pvt Ltd, which is gearing up for a stock market debut, has ......

Multiples PE-backed Zenex buys European animal nutrition firm

Healthcare

Malvika Maloo

Jada Fund of Funds, an investment vehicle created by Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF), has joined as a limited partner for the first time in a fund managed by an India-headquartered firm by betting on venture debt firm Stride Ventures. 

The Riyadh-based investor has made a commitment to Stride’s Gulf Cooperation Council (GCC) fund. The firm, which specialises in providing venture debt, is planning to deploy $200 million (around Rs 1,821 crore) in Saudi Arabia’s entrepreneurial and innovation ecosystem over the next two years. 

“The partnership with PIF’s Jada Fund of Funds adds to a series of strategic sovereign and global investor relationships supporting the broader Stride platform,” Stride said in a statement. 

The deal is Jada’s third investment in the private debt space, as it doubles down on the fast-growing asset class in the GCC region. 

In 2024, it backed California-based global private credit firm Partners for Growth that offers specialised debt solutions for entrepreneurs in the tech and innovation space, investing in the $500 million fund. Only a year before, in 2023, had Jada ventured into the private credit space with its commitment to Abu Dhabi-based Ruya Partners' $250-million Private Credit Fund I. Ruya, the region’s first partner-owned private credit firm, offers capital solutions in the form of private debt to small and medium enterprises in the region.

Jada Fund of Funds was set up in 2018 with $1 billion in capital from PIF to support the development of Saudi Arabia's private capital ecosystem. The platform invests across venture capital, private equity and increasingly private credit. Since inception, it has deployed close to $600 million across nearly 50 funds. 

The firm has since invested in Iliad Tech Ventures Fund I, Investcorp’s Saudi Pre-IPO Growth Fund,  Aliph Capital Fund I, OB - iMENA Rua Growth Fund I, Beco Capital, Global Ventures, Shorooq Partners, Nuwa Ventures, Hala Capital, and 500 Falcons. 

Meanwhile, Stride, founded in 2019, has expanded from a domestic debt player to an international financial platform and has on-ground presence across India, GCC and UK/ Europe. It had enabled $1.6 billion in credit across nearly 200 portfolio companies, including 20 unicorns. 

Jada Fund of Funds, an investment vehicle created by Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF......

Saudi PIF-backed Jada places its first LP bet on an India-based fund manager

Nitesh Kumar

Early- to mid-stage venture capital firm Blume Ventures has consistently picked a thesis and stayed with it long enough for the market to test it. Nowhere is this more evident than in fintech, where the firm has backed around 30 companies riding India’s digital finance transformation.

The headline numbers, however, tell only part of the story. Of more than 20 active bets, over 10 portfolio companies have filed their FY25 financials. While a healthy number are growing, roughly a third are showing early signs of stress. As these are mostly vintage bets, five to 10 years old, their performance offers a clearer view of how Blume’s long‑term fintech thesis has played out. 

The firm currently lists about 28 startups in its fintech portfolio, of which it has exited six. Four exits came through acquisitions, while two happened quietly without making it to the headlines.

Emails sent to the VC firm remained unanswered till the time of publishing this article.

A three-phase thesis

Blume's fintech journey can be divided into three distinct phases, each tracking a broader inflection point in India's digital finance evolution.

The first phase, roughly pre-2015, was focused on infrastructure. IDfy, an identity verification firm, from which Blume is now in talks to exit via a secondary route, best represents this. At the time, fraud detection and KYC infrastructure were invisible layers, and backing them early was a contrarian call.

The second phase, from 2015 to 2019, was distribution. UPI had launched and Jio had made data free. Demonetization had its impact on businesses and fintechs were no exception. The consumption wave was real and Blume rode it by backing Slice (youth credit), Turtlemint (insurance distribution), Smallcase (retail investing), Servify (device finance), Kaleidofin and Jai Kisan (financial inclusion). Multiple follow-on rounds in the same companies signalled high conviction.

The third phase started from 2019 and sharpened after COVID. The NBFC crisis had shown that distribution without underwriting is a liability masquerading as an asset. During this time, Blume backed Bureau (fraud analytics), BlueCopa and Aerem (cashflow-based lending), and DPDZero (delinquency management). 

Notably, these were not consumer playbooks. They were bets on the infrastructure of risk itself. 

Blume’s more recent bets, including Mysa, Opticap, PowerUp Money, and Zoven, extend this logic into structured credit models and AI-led risk layers.



The distress cluster maps largely to consumer‑facing, distribution‑heavy bets made during the high‑growth years. 

Of the roughly 13 fintech companies that have filed FY25 numbers, Zopper, Stellapps, Jai Kisan and DPDZero appear to be entering a test of time. VCCircle also dug deeper to assess the firm’s underwater bets, including Finvolve and Instamojo, which it recently exited without public disclosure.

Zopper is the most alarming on paper. The insurance and retail brokerage group, which has raised $125 million (Rs 1,136 crore) to date, including a $75 million round in 2022, saw its finances hit by a GST investigation spanning December 2023 to February 2025.

The probe alleged ineligible input tax credits claimed on marketing services from vendors with inactive registrations. A mid-year shift to a new SAP system was done without switching on a feature that tracks changes in the database, which concerned auditors. The company eventually reversed the tax credits and paid roughly Rs 24 crore in taxes and penalties, VCCircle has learnt. 

Zopper’s consolidated revenue fell 18.6% to Rs 357 crore, while net losses nearly doubled to Rs 203 crore. Its subsidiary Blink Fix’s standalone revenue also collapsed from Rs 289 crore in FY24 to Rs 67 crore in FY25, as per the annual statement. Zopper Insurance Brokers’ standalone revenue dropped from Rs 396 crore in FY24 to Rs 275 crore in FY25, according to VCCEdge, the data and research platform of VCCircle.

The prolonged investigative overhang has materially damaged the company’s core business.


Stellapps also faces questions. The dairy-tech and farm digitization platform saw service exports, which had contributed over Rs 12 crore in FY24, fall to near zero in FY25.

Consolidated revenue dropped from Rs 357 crore to Rs 206 crore, though net losses narrowed to Rs 55.45 crore from Rs 70.61 crore. A Rs 121 crore ($13.3 million) fundraise during the year provides a cash buffer, but does not fully explain the disappearance of what had looked like a foundational revenue stream. 

Meanwhile, Vipatra Technologies-operated DPDZero reported zero employees, zero physical assets, and eliminated all rent, power, and utility expenses in FY25, VCCircle has learnt.

The company’s revenue fell 34% to Rs 5.2 crore and total expenses declined to roughly Rs 5 crore, yielding a Rs 29 lakh profit before tax. It is, on one reading, a successful pivot to an asset-light outsourcing model. However, the company had raised $7 million last year in a Series A round to develop its multilingual AI collection agent and fuel the launch of a network of professional field collection agents.

Among other struggling bets, Jai Kisan stands out, having already made a strategic pivot that could become a model for portfolio companies still trying to sail through the maze.


Jai Kisan’s FY25 numbers look weak in isolation, with standalone operating revenue falling sharply from Rs 39 crore to Rs 9 crore, and technology fee income collapsing from Rs 12.6 crore to Rs 1.8 crore. 

However, it is important to note that in June 2024, the company acquired a 73.11% stake in NBFC Kushal Finnovation Capital, fundamentally altering its business. Jai Kisan is no longer a tech‑enabled distribution facilitator for third‑party lenders, but a full‑stack financing group with its own balance sheet. 

While consolidated revenue still declined year-on-year, the shift reflects a broader industry logic: distribution-only fintechs are being squeezed by rising acquisition costs, shrinking fee pools, and compliance burden of working with regulated lending partners. Owning or controlling the NBFC layer internalizes margins and builds defensibility. 

Underwater bets

Instamojo underscores the risks of regulatory‑dependent business models. The digital payments firm had been posting operating losses since years before reporting about Rs 16 crore in standalone revenue in FY24. However, when the RBI returned its payment aggregator/payment gateway licence application, the business unravelled. VCCircle reported in 2023 that Instamojo was seeking to raise fresh funding to give an exit to early backers.

Instamojo’s standalone revenue collapsed 84% to Rs 2.5 crore. A Rs 14.4 crore write‑off followed after the company had spent heavily on building a new platform tied to the licence it ultimately never received. All the work and investment that went into the platform became stranded assets that had to be written off the books, VCCircle has learnt.

Regulatory filings show the company’s going‑concern status now depends on support from its US parent Instamojo Inc.

Finvolve also appears to be in survival mode. Revenue dipped from Rs 21 crore to Rs 19 crore, but the company narrowed its losses by cutting employee expenses by 25%, indicating it likely reduced headcount. 

The cost‑cutting, combined with declining revenue, points to early signs of distress. Blume converted its CCPS into equity shares during FY25, but no new investors came  on board. On its website, Blume has recently marked the company as an exit, even though it first invested in 2013, indicating the firm may have written off its position.

Against these red flags, Blume has two cleaner exits in sight. IDfy, which it backed in the early years, is in secondary-route discussions, while insurtech firm Turtlemint is gearing up for an IPO. Both are businesses with structural moats, IDfy in KYC infrastructure and Turtlemint in insurance distribution, that were less exposed to the unit economics churn that hurt several consumer fintech bets.

Blume Ventures got the macro call right. India's digital finance transformation has been large and fast. What proved harder to forecast was which layers of that transformation would generate durable returns. Infrastructure and selective distribution held up; growth-first consumer fintechs, regulatory-dependent models and international revenue assumptions were put to the test. 

Whether Blume’s newer bets, focused on risk intelligence and structured credit, reflect lessons learnt from earlier investments, a thesis evolution, or simply the fashions of the post‑2021 funding market is something that will take another three-five years to determine.

Early- to mid‑stage venture capital firm Blume Ventures has consistently picked a thesis and stayed with it long ......

Spotlight: How Blume Ventures\' fintech portfolio is faring

Swet Sarika

Singapore's sovereign wealth fund GIC is exploring exit options for a real estate investment in India it made around eight years ago, two people close to the development told VCCircle.

One of the most active investors in India’s real estate market, GIC has partnered with developers such as Nirlon Ltd, DLF Ltd, and Godrej Properties over the years.  

In recent years, however, it has also focused on exits from older investments. 

Last year, as reported by VCCircle, GIC sold its 49.9% stake in a joint venture with DLF that was set up in 2015 to develop two housing projects in Central Delhi. In 2023, it sold its 50% stake in Runwal Group's R City Mall for Rs 1,000 crore ($110 million).

In the latest planned exit, GIC is looking to sell its stake in Provenance Land, a joint venture set up in 2018 with the RK Jatia Group. The JV was formed to develop Four Seasons-branded private residences and an office tower on a 4.5-acre land parcel in Worli, Mumbai. GIC had picked up a minority stake in the venture for roughly Rs 1,300 crore.

"There have been attempts to structure a deal that will give an exit to GIC, but nothing has materialized. The joint venture first needs to refinance its existing debt and then a new equity partner can buy out the stake of GIC," one of the persons involved in the transaction said.

The second person said the exit process has been underway for some time. "We have shown the deal to quite a few investors, including some of the most active players in the real estate market, but there are challenges that need to be addressed before a deal is finalized," the person said.

Both persons said the challenges are related to debt and completion timelines. 

If the exit materializes, it will mark yet another liquidity event for GIC in India’s real estate sector.

Separate emails sent to the spokespersons of GIC and Provenance Land remained unanswered till the time of publishing this article. 

GIC's current key real estate exposure in India includes Nirlon, where it owns over 60% stake; DLF's rental arm DLF Cyber City Developers, where it owns 33% stake; an investment in Godrej Properties; a partnership with ESR Group for logistics parks; and a partnership with Brookfield to own office assets across Mumbai, Hyderabad and Bengaluru, among others. 

Meanwhile, the Jatia Group has a joint venture with Japan's Sumitomo Realty & Development Co Ltd (Goisu India) to develop two Grade-A commercial projects in Bandra Kurla Complex (BKC), with a total built-up area of 2 million square feet.

Singapore's sovereign wealth fund GIC is exploring exit options for a real estate investment in India it made around......

GIC explores exit from eight-year-old India real estate bet

Infrastructure

Real Estate

Ajay Ramanathan

SBFC Finance Ltd, the Indian non-bank lender majority owned by New Zealand-born billionaire Richard Chandler’s Clermont Group, is set to secure fresh capital from a new offshore investor.

The lender, which listed on stock exchanges in August 2023 and previously counted private equity firm Arpwood Partners (now known as Vixar) as an investor,  will raise up to $50 million (Rs 454 crore) from International Finance Corporation in debt capital. 

This is the first time that IFC, the private-sector investment arm of the World Bank Group, is investing in SBFC Finance.

SBFC Finance will use the proceeds from the four-year IFC loan to grow its loan book towards micro, small and medium-sized enterprises (MSME), including women MSMEs, a document accessed by VCCircle showed. It will also use a portion of the proceeds to provide financing to borrower groups in Uttar Pradesh. 

IFC said that, with the proposed investment, it intends to increase access to finance for the underbanked and credit-starved MSMEs, including women borrowers, thereby enabling them to expand their business, generate income, and, thus, contribute to their economic empowerment.

Apart from the loan, IFC intends to engage with SBFC Finance in the areas of responsible finance assessment to ensure good governance and support the strengthening existing risk management practices, the document said.

SBFC Finance provides loans against property and loans against gold. The company focuses on segments that have limited access to formal credit channels. The NBFC operates 230 branches across 17 states and two union territories in India, as of December 31.

Clermont Group owns a 52.8% stake in SBFC Finance. The remaining 47.2% is held by public shareholders; of which 26.4% is held by institutional investors and the rest is held by non-institutional investors. 

The company’s net profit rose 34% year-on-year to Rs 118 crore in October-December 2025-26. Its assets under management rose 29% from a year earlier to Rs 10,478 crore as on December 31.

SBFC Finance Ltd, the Indian non-bank lender majority owned by New Zealand-born billionaire Richard Chandler’s ......

Clermont-controlled SBFC Finance taps new offshore investor for capital

Reuters

National oil company Kuwait Petroleum Corporation (KPC) has held early stage talks with a large group of potential investors over a $7 billion stake sale in its crude oil pipelines, three sources familiar with the matter said, following similar moves by Gulf peers Saudi Arabia and the United Arab Emirates.

BlackRock, Brookfield Asset Management, EIG Partners and buyout group KKR are among those that have shown interest, the sources said. Also showing interest are Chinese state enterprises China Silk Road Fund and China Merchants Capital, along with I Squared Capital and Macquarie Infrastructure Partners, the sources said.

The transaction is structured with around $1.5 billion in equity and the remainder financed through debt, the three sources said.

Sheikh Nawaf Saud Al-Sabah, KPC's deputy chairman and chief executive, is leading a steering committee overseeing the process, which sources described as being managed with close, hands-on oversight, with the committee convening every few weeks to monitor progress.

"We are studying the possibility of leasing and re-leasing (oil) pipelines in the country," Al-Sabah told reporters in September. "The pipelines are assets owned by KPC and do not generate direct financial returns. If there is an opportunity to secure additional financing through these assets... then welcome," he added.

BlackRock, Brookfield, Macquarie, KKR, EIG, I Squared declined to comment. KPC, China Silk Road Fund and China Merchants Capital did not respond to requests for comment. 

KPC is now approaching other banks to join HSBC in underwriting the debt portion of the deal, two of the sources said.

Two of the sources said that the process to formally launch the oil pipeline network stake sale could start as soon as the end of this month, as Reuters reported last month. 

The concession, said to span 25 years according to the sources, faces a testing backdrop. Crude oil hovering around $71 per barrel is weighing on projected volumes and returns, with geopolitical tensions in the Gulf region presenting an additional layer of complexity, one of the sources said.

The move echoes deals in recent years by Saudi Aramco, Abu Dhabi National Oil Company and Bahrain's Bapco Energies to raise funds from their pipeline infrastructure networks. Such deals provide upfront cash in return for tariff payments over time.

Kuwait Petroleum Corp in late 2023 said it will spend $410 billion through 2040 on a strategy, that aims to boost production capacity to 4 million barrels per day.

BlackRock, which last year signed a similar deal for Aramco's Jafurah gas project processing facilities in Saudi Arabia, will open an office in Kuwait and has appointed Ali AlQadhi to lead operations in the country, Kuwait's state news agency said in September.

National oil company Kuwait Petroleum Corporation (KPC) has held early stage talks with a large group of potential ......

BlackRock, Brookfield, KKR, others eye $7-bn Kuwaiti oil pipeline deal

Xiaomi has challenged an Indian tax ruling that said the company evaded $72 million in tariffs on royalty payments, according to legal documents, a dispute that the Chinese company and lawyers say is a test of the country's legal framework for contract manufacturing.

Xiaomi, a major player in the Indian smartphone market, has for years had its contract manufacturers in the country import parts from China, pay customs duties and then assemble the devices.

But in November, an Indian tax tribunal ruled those import values had been undervalued for at least three years leading up to 2020 as they failed to include the 2% to 5% royalties that Xiaomi paid to foreign firms like Qualcomm for using their technologies in components.

In a Supreme Court challenge, which Reuters is first to report, Xiaomi argued that the tax tribunal erred by saying it was the "beneficial owner" of the components while requiring it to pay tax on the royalties. Xiaomi has asked that the ruling be overturned.

The implications of the tribunal's ruling are far-reaching as they indicate "an implicit mistrust of the entire contract manufacturing industry," Xiaomi said in a filing dated January 15, which is not public but was reviewed by Reuters.

The tribunal decision "grievously injures the established practices of (the) manufacturing sector."

Xiaomi, Qualcomm and India's customs department did not respond to requests for comment.

Precedent-setting case

Xiaomi's former contract manufacturers, Flextronics Technologies India, a unit of U.S.-listed Flex, and Bharat FIH, a unit of Taiwan's Foxconn, are also opposing the tax tribunal's decision at the top court, according to two people with direct knowledge of the matter and the court's online listings.

Flex declined to comment and Foxconn did not respond to a request for comment.

Tax lawyers say the case is being closely watched by global investors and companies who have bet big on India.

A ruling in favour of Indian authorities could increase scrutiny of the royalty agreements that many importing companies have in sectors including pharmaceuticals, autos and manufacturing, lawyers said.

"The Supreme Court ruling will be widely significant as it will specify the powers of Indian customs," said Tarun Jain, a New Delhi-based tax lawyer.

"If upheld, it can empower authorities to seek taxes on other related payments made by companies who may be exercising effective control over goods being imported by their partners."

Luring foreign companies like Apple to manufacture in India has been a key priority of Prime Minister Narendra Modi in recent years. Volkswagen and Samsung are also contesting sizeable Indian import tax demands in court, an issue that has soured investor sentiment.

Xiaomi's headaches

According to Indian law, the customs tax demand of $72 million could rise to more than $150 million with interest and penalties if Xiaomi India loses in court. That could put a strain on the company as its profits were $31.7 million in the 2023-2024 financial year.

On top of that, around $610 million of Xiaomi India bank funds have been frozen by a federal financial crime-fighting agency, the Enforcement Directorate, since 2022 due to allegations of illegal remittances. The company has denied the allegations.

Counterpoint Research data showed Xiaomi's India smartphone market share plunged to 12% in December from a high of 31% in early 2018.

In a hearing on Monday, Xiaomi's lawyer told the Supreme Court the tribunal's decision will "lead to chaos."

Its court filing showed Xiaomi will argue import taxes are to be paid by importers - in this case contract manufacturers - and its royalties are not linked to those imports and therefore should not be taxable.

In November, the Indian tax tribunal said Xiaomi "indulged in deliberate suppression of facts" and royalties need to be taxed as the company is paying for technology that is critical to the imported parts.

During Monday's hearing, the court told the Indian government to respond to Xiaomi's plea that its royalties should not be taxed.

Xiaomi has challenged an Indian tax ruling that said the company evaded $72 million in tariffs on royalty payments, ......

Xiaomi challenges India tax authority in Supreme Court over tariffs on royalties

Manufacturing

Aman Rawat

Capillary Technologies India Ltd, which is backed by venture capital firm Avataar Venture Partners and growth-stage investment firm Filter Capital, has agreed to acquire US-based SessionM from Mastercard for $20 million (around Rs 181.7 crore) in cash, subject to customary closing adjustments.

The Bengaluru-headquartered loyalty SaaS firm will buy 100% of SessionM through its subsidiaries, according to a stock-exchange disclosure. The acquisition strengthens Capillary’s presence in North America, where SessionM derives over 70% of its revenue.

SessionM reported revenue of $50.5 million in calendar year 2025 and serves more than 40 enterprise customers across sectors such as food and beverage, retail and airlines. 

Capillary said the deal will expand its access to Latin America and add to its Asia-Pacific portfolio. It expects to integrate around 60 customers from SessionM and Kognitiv over the next 24 to 36 months, with stable post integration operations targeted by 2029, the company said.

The deal comes months after Capillary went public in November 2025. Venture investors Avataar and Filter Capital, which had earlier recalibrated their IPO exit plans, remain key shareholders. 

Started in 2012 by IIT Kharagpur alumni Aneesh Reddy, Ajay Modani and Krishna Mehra, Capillary Technologies builds loyalty management and customer engagement software for enterprises through its SaaS platform. The firm has a team of more than 150 professionals in the US and over 800 employees worldwide. Anant Choubey and Sridhar Bollam are also among the co-founders of the firm. 

Avataar had led Capillary’s Series D funding round in 2023, alongside its limited partners Pantheon, 57Stars and Unigestion. Filter Capital also participated in that round.

Capillary has been pursuing a consolidation strategy in the fragmented global loyalty technology market. Since 2021, it has acquired Persuade, Brierley and Kognitiv, aiming to migrate acquired customers onto its core platform to drive margin expansion and free cash flow generation.

With the addition of SessionM, Capillary’s combined annual recurring revenue is expected to cross $115 million, with a stronger tilt towards food and beverage, airlines and retail in North America.

Capillary Technologies India Ltd, which is backed by venture capital firm Avataar Venture Partners and growth-stage ......

Avataar, Filter Capital-backed Capillary Technologies snaps up SessionM

Asha Menon

The finance ministry’s budgetary proposal earlier this month to change the way the Indian government taxes buyback of shares by companies has prompted alternative investment firms, which include private equity and venture capital investors, to seek a clarification, industry executives told VCCircle.

The investment firms have approached the finance ministry asking for a review of the buyback taxation proposed for promoters, the executives said, asking not to be identified as they are authorised to speak to the media. The executives say that the taxation could unintentionally hurt the funds and even minority shareholders who are invested through the funds. This, in turn, could discourage investments through regulated funds, they say.

Finance Minister Nirmala Sitharaman had proposed in the Union Budget 2026, presented on February 1, that buyback for all types of shareholders be taxed as capital gains but with differential rates for promoters. Promoters were being charged an additional buyback tax “to disincentivise misuse of tax arbitrage”, she said. 

The effective tax rate had been proposed as 22% for corporate promoters and 30% for non-corporate promoters, excluding any cess or surcharge.

To give effect to the taxation proposal, the Finance Bill 2026 has defined any shareholder with more than 10% stake in a company as a promoter. This would mean that PE/VC funds or other AIFs could also be considered a promoter and invite the higher taxes, even though that would not be in line with the definition of ‘promoter’ under other regulations including the Securities and Exchange Board of India’s Issue of Capital and Disclosure Requirements (ICDR) Regulations and with the exclusions given to the funds under the Income-Tax Act, 2025.

Therefore, the funds have asked for clarification to be issued through the Central Board of Direct Taxes (CBDT) stating that they be excluded from the ‘promoter’ category.

Sunil Badala and Nirmal Nagda, partners in the tax practice at KPMG in India, wrote in a blog earlier this month that the 10% threshold for deciding the promoter tag appears to be small in the present context. “Various private investors, including the private equity investors, do invest more than the prescribed limit, but may not necessarily be in control of the company to enforce buy-back,” they wrote.

To be sure, such recommendations go from various industries to the finance ministry every year after the presentation of the Finance Bill and before parliament’s approval turns it into law.

The executives cited above said that, in their appeal to the finance ministry, the funds have elaborated their reasons in detail. They have said this tax proposal does not align with the understanding of ‘control’, as given in the Companies Act or under SEBI Regulations, which recognise ‘control’ as having a say in the running of the company or its strategy. Since funds are considered just financial investors, SEBI’s ICDR Regulations exclude them from the promoter category but the Income-Tax Act does not make this distinction. Therefore, the higher buyback taxes could apply to the funds as well.

Moreover, they said that this proposed taxation could also be in conflict with Section 224 and Schedule V of Income-Tax Act, 2025, which grant the funds a pass-through status. Under the Act, the income is not taxed at the fund level but at the hands of the unitholders. This is because the income is meant to be taxed as though the investor had directly backed the portfolio company.

The funds argue that if they are taxed as promoters, then it would be unfair to their investors since individually they might be minority shareholders in the portfolio company and own below the 10% promoter threshold. This could discourage smaller investments made through regulated funds, the industry's representatives have said.

The finance ministry’s budgetary proposal earlier this month to change the way the Indian government taxes buyback of ......

Why PE, VC funds are seeking clarification from FinMin on buyback taxation

VC funds are seeking clarity from India’s Finance Ministry on buyback taxation rules to improve investor certainty and fund strategies.

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Dermatology platform Puresta, circuit-design startup Tatvam AI, nail care brand nailinit, among other startups, have ......

Temple, Puresta, others bag funding; Capital-A, SanchiConnect to back three startups

General

The number of private equity and venture capital deals rose sequentially during the five-day period ending Friday but a ......

Deals Digest: PE-VC volume improves but aggregate value slumps

Emerging fund managers must build a strong track record and demonstrate returns before hitting the road to raise capital......

Track record, DPI critical for raising capital: Panellists at VCCircle LP Summit

Prithvi Durai

Development finance institutions such as the International Finance Corporation and the European Investment Bank remain ......

Institutional capital deployment faces macro, liquidity risks: Investors at VCCircle LP Summit

Multiples PE-backed Zenex buys European animal nutrition firm

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Healthcare

Multiples PE-backed Zenex buys European animal nutrition firm

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Temple, Puresta, others bag funding; Capital-A, SanchiConnect to back three startups

Finance

Saudi PIF-backed Jada places its first LP bet on an India-based fund manager

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Deals Digest: PE-VC volume improves but aggregate value slumps

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Track record, DPI critical for raising capital: Panellists at VCCircle LP Summit

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