Peak XV Partners (formerly Sequoia Capital India & SEA), through its fund Sequoia Capital India Investments IV, has totally exited its investment in Go Fashion selling its over 10 per cent stake in the apparel brand in bulk deals worth ₹624.8 crore.
The venture fund has made a return of 16 times on its initial investment on a US dollar basis with a 43 per cent internal rate of return, sources said. In Indian rupee terms, the return is 20 times of its initial investment and 48 per cent internal rate of return. The initial cost was $10 million.
Sequoia had invested in Go Fashion in 2014 and the women’s apparel maker recently listed on the bourses, providing it with an exit opportunity. Buyers included ICICI Prudential Life insurance, BNP Paribas, Kuwait Investment Authority and Société Generale, exchange data showed.
This marks the venture capital fund’s first exit in India following the recent announcement by Sequoia Capital to separate its US, India, and China operations into distinct entities. The Indian branch has now been rebranded as Peak XV Partners, led by Shailendra Singh, formerly the Managing Director of Sequoia Capital India & SEA, before the split. With $9 billion in assets under management and $2.5 billion in uninvested capital, Peak XV Partners oversees the Indian operations, while the China arm manages a significantly larger asset portfolio of $56 billion.
Also read: Sequoia to separate China, India, and Southeast Asia by March 2024
While the reason given for the split was that the funds were under portfolio conflict, industry watchers are reading more into it. Splitting the US and China businesses into separate entities is being seen as a consequence of rising tensions between the two countries.
Industry views
In India, views on the split have been positive mostly. Some viewed it as a vote of confidence for India and its maturing start-up funding ecosystem. Snapdeal’s co-founder Kunal Bahl said that the move was significant as it showed that India had enough standalone opportunity to attract top global investors.
Sheroes founder, Sairee Chahal tweeted, ““Sequoia is not splitting. Asia is rising.” Global investor Balaji Srinivasan, said, “This is another step in India’s emergence. Now we have the global Indian tech investor.”
Sequoia, which has bankrolled companies such as Zomato, Byju’s, Bankbazaar, Mamaearth, and Oyo has been struggling with some of its investee companies. Byju’s has been engulfed in issues revolving around governance, its onboarding practices, and now its refusal to repay maturing loan worth over $1 billion. BharatPe has also run into governance issues.
Last year, Trell and Zetwerk were probed by regulatory agencies for financial irregularities, while Go Mechanic went into a downward spiral after its founders admitted to creative accounting to inflate revenues and user metrics.