IPO-led exits for VCs around the corner

In the past 12-18 months, Internet and mobile VAS start-ups, such as Makemytrip.com, People Interactive Group and Cellebrum, have been quietly concluding ‘pre-IPO’ deals.

November 27, 2007
Venture Matters | Snigdha Sengupta

When Info Edge (India) Ltd, the New Delhi-based parent of jobs portal Naukri.com, made a splashing debut on the Bombay Stock Exchange in 2006, many venture capitalists (VCs) said the tide had turned for Indian Internet start-ups.

This was the first listing by an Internet start-up on the domestic bourses and a thumping one at that—Info Edge raised Rs170 crore through the listing. The jinx had been broken—start-up Internet businesses could be built in India and taken public, the most preferred exit route for VCs anywhere in the world. Then, everything went quiet, again.

As it turns out, things have been quiet for a reason. In the past 12-18 months, a bunch of Internet and mobile value-added services (VAS) start-ups have been quietly preparing for the big party. Evidence: a series of what may be termed ‘pre-IPO’ deals concluded during this period. The qualification stems from the class of investors who have picked up stakes in what would conventionally be dubbed early-stage, venture businesses. Samples: Recently, US hedge fund Tiger Fund led a $15 million (Rs59.1 crore) investment round in travel portal Makemytrip.com (Makemytrip.com India Pvt. Ltd).

Last October, Goldman Sachs Group, Inc. alongwith Deutsche Bank AG and Polygon Investment PartnersLlp. invested $27.8 million in mobile VAS start-up OnMobile Global Ltd. In December 2006, Lehman Brothers bought an undisclosed stake for an undisclosed investment in another mobile VAS company called Cellebrum. And now there is speculation that Goldman Sachs is picking up a stake in matrimonial services portal Shaadi.com, promoted by the Mumbai-based People Interactive Group. Most of these companies have talked about listing plans across the media and in this newspaper.

So, it does seem that 2008 and going into 2009, will see a record number of Internet and mobile VAS start-up IPOs (initial public offering).If all goes well, it will be a huge validation of India’s ability to scale start-up businesses, irrespective of the sector.

IPOs, more than trade sales (merger and acquisition deals), are a greater proof of a market’s viability, from a VCs’ point of view. The return potential is higher and liquidity concerns are addressed. India has lagged behind some of its Asian peers, notably China, in terms of IPO-led exits for VCs. It is only recently, after some kind of exit track record was established through trade sales that VCs have returned to this market. The Internet and mobile VAS segments remain the two highest funded by VCs in India. But, as such, investors now begin to apply investing principles to non-technology businesses as well, something that they have not done in their home markets, the handful of imminent listings next year bear a huge responsibility. All the best to them.

Snigdha Sengupta is Mint’s resident expert on private equity and venture capital.

Spicy service

Financial Express, November 23, 2007

Cellebrum to go for a major revamp

Financial Express, November 21, 2007

Book Mark

Business World, 20.11.2007

Re-branding of Cellebrum as-Spice Mobile VAS

Economic Times; 8.11.2007

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October 25, 2007

Five Wishes

I have been away for a while from the blog (not a happy thought)…work commitements, traveling etc. kept me from updating it more frequently; a book review of a fabulous book that I read recently is a great way to touch base with all!

Written by: Gay Hendricks

Try looking at your life from the perspective of your deathbed—was it a success; if not, what do you wish you should have accomplished? Do you know what you want? Whether you answer to the question is “YES” or “NO” is not relevant what is significant is that this book answer the question from both perceptions. “Five Wishes” offers the reader a fresh insight and clarity of the process of creation.
The extraordinary thing about this book is that it’s inspired from an actual experience/incident and so makes it that much more RELEVANT! Five Wishes offers a plethora of perspectives for leading a fulfilling life…soul searching is another aspect that is omnipresent throughout. It's a personal testimony of how the author’s life is altered once the he changes his perception of problems and how it influences his life.

30 years ago Gay Hendricks’s life is changed by a chance encounter at a cocktail party. A stranger asked him to imagine himself on his deathbed and consider the question “Was your life a complete success?” If not, the stranger suggested, “What would be the things you’d wish had happened that would have made it a success?” The stranger turned out to be well-known spiritual teacher Ed Steinbrecher, and the Hendricks's one wish became five life-transforming ones. This fabulous book shows you how to live Hendricks's five wishes in our own lives and make a success. The foreword of the book explores the power of this approach and explains why the guru insisted Hendricks share it with others.

This attitude assists an individual to become committed to their decisions, follow them through and complete things—which further leads to peace and harmony. As the author says; 'What I've come to see is that completing something, no matter how large or how small, puts you into harmony with the universe.' This is an interesting way of looking at personal commitments. Many goals on a personal level and professional level can be achieved if people took this perspective seriously and followed it religiously. The book helps you evaluate where you stand in life both professionally and personally. A great technique for unlocking the power of making ourselves believe and figuring out what is most significant to us and where are we headed. The book describes the author's five wishes simply and how he insures that they are manifested. Even if your wishes/desires differ from his don’t be disheartened because the author presents great spiritual ideas for fulfilling your dreams.

You can never know when something as small as a chanced encounter or an experience can dramatically transforms your life—for the better. So keep you ears and mind open…to ideas, suggestions etc. Create the life of your dreams with the help of this book as the author passes on to all of us the central insight he gained in that magic moment…which could be yours too.

Few examples of what others have to say about the book

"With brilliance and clarity, Gay Hendricks shares this inspirational story from the heart. Five Wishes can help anyone find the power within to change their life."

—John Gray, PhD, author of Men Are from Mars, Women Are from Venus

"It is time to make all your wishes come true. Gay Hendricks's brilliant, easy-to-understand five questions will take you the distance to happy wish-fulfillment. I wish everyone would read, absorb, and apply the wisdom of this great and inspiring book."

—Mark Victor Hansen, coauthor of the Chicken Soup for the Soul series