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Global investors rush to back IPO-bound Indian startups

Written by Moulishree Srivastava Published on     2 mins read

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Private equity and venture capital firms have poured in a record USD 49 billion into Indian companies across 840 deals during the first nine months of 2021.

Global investors are rushing to join the funding rounds of major Indian startups looking to go public.

Edtech giant Byju’s, worth USD 16.5 billion, is in the process of raising USD 295 million (INR 2.2 billion) led by Oxshott Venture Fund, a report by local media Economic Times said, citing regulatory filings sourced through business intelligence platform Tofler.

Edelweiss’s Crossover Opportunities Fund, Verition Multi-Strategy Master Fund, XN Exponent Holdings, and MarketX Ventures will also participate in the edtech major’s Series F funding round, the report added. Byju’s will allot these investors 77,174 compulsory convertible cumulative preference shares at a premium of USD 3828 (INR 2,85,062), as per the filings. The funding is expected to be part of the rumored larger USD 1.5 billion round that Byju’s is planning to raise at a valuation of USD 21 billion before filing for an IPO next year.

Several investment banks have reportedly proposed a valuation of USD 40–50 billion for the listing, for which the company may file documents as early as the second quarter of 2022. Earlier, Byju’s was looking at a timeline of 12 to 24 months, which means it has hastened its plans and joined a long list of high-profile companies like e-commerce major Flipkart, hospitality giant Oyo, and ride-hailing giant Ola that are looking to go public next year.

Byju’s isn’t the only one charming the big shot investors across the world. Temasek-backed online pharmacy unicorn PharmEasy—which is likely to file papers for an initial public offering (IPO) later this month—is in discussions with a slew of new investors, including hedge fund Steadview Capital, IIFL, and a US hedge fund for a pre-IPO funding round. Last month, PharmEasy was reported to be close to raising USD 200 million from investors like Blackstone, BlackRock, Amansa Capital, Janchor Partners, and OrbiMed at a valuation of USD 6 billion. This is significantly higher than PharmEasy’s USD 4 billion valuation during its USD 500 million Series F round earlier this July.

The e-pharmacy company has also concluded a secondary sale of shares worth USD 100 million, giving some of its existing investors, like Eight Roads Ventures, Bessemer Venture Partners, and Fundamentum, a partial exit.

Similarly, Paytm, which filed papers for a USD 2.2 billion IPO in July, is in the final stages of talks to rope in Swiss RE, a Zurich-based reinsurance giant, as a strategic partner for its insurance business. A source-based report by Economic Times said Swiss RE is eying a 20-25% stake for a USD 100 million in the fintech company.

According to Bengaluru-based research firm Venture Intelligence, private equity and venture capital firms have poured in a record USD 49 billion in Indian companies across 840 deals during the first nine months of 2021. For context, the capital inflow has already surpassed the USD 39.5 billion investment that came in the entirety of 2020. Notably, investors have put in USD 20 billion, or 41%, of the total capital in 2o21 so far into Indian unicorns.

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