SUMMARY
Sources said, “The early-stage investors (of Chargebee) are offering the stake at a steep discount. With this, the startup’s valuation could be as low as $1.5 Bn.”
The development comes a month after Inc42 reported Chargebee sacked 10% workforce, totalling 142 employees
In February, the SaaS unicorn sealed $250 Mn funding round at a post-money valuation of $3.5 Bn
SaaS unicorn Chargebee’s investors are reportedly holding discussions with new and existing institutional backers to sell a portion of their shares in the startup. However, information on the selling stake is yet to be confirmed.
Mint quoted sources saying, “The early-stage investors (of Chargebee) are offering the stake at a steep discount. With this, the startup’s valuation could be as low as $1.5 Bn.”
It is prudent to note that Accel Partners is one of the early investors in Chargebee.
The development comes a month after Inc42 reported Chargebee sacked 10% workforce, totalling 142 employees, of the entire workforce due to unfavorable economic conditions.
Set up in 2011 by Krish Subramanian, Rajaraman Santhanam, Saravanan KP and Thiyagarajan T, the startup manages a revenue management platform that automates operations of high-growth companies. Its clientele includes Okta, Freshworks, Calendly, and Study.com among others.
Earlier in February, the SaaS unicorn sealed a $250 Mn funding round at a post-money valuation of $3.5 Bn. The round was led by Tiger Global and Sequoia Capital along with other investors such as Insight Partners, Sapphire and Steadview Capital, among others.
During the same month, the Chennai-based unicorn acquired collections management platform numberz for an undisclosed amount.
It is here to mention that in April last year, it gained unicorn status after securing $125 Mn in Series G funding round led by Sapphire Ventures, Tiger Global and Insight Venture Partners.
So far, it has raised about $470 Mn funding from investors.
In India, Icertis, Zluri, FreshWorks and Celebal Tech are some startups working in the SaaS sector.
According to a SaaSBOOMi and McKinsey report, the country’s SaaS sector will capture about 6% of the global market by 2030. The sector is also anticipated to generate $50-$70 Bn revenue by the above-forecasted period.
The industry has lately witnessed a slew of funding activities such as Metalbook raising $5 Mn, Celebal Technologies securing $32 Mn and UserStudy bagging $1 Mn, among others.
Investors Selling Stakes
Investors selling stakes at Chargebee is suggestive of the present lull period that the Indian startup ecosystem has been reeling under. Increasing CAC, growing expenses and changing customer behavior along with macroeconomic conditions are a few contributing factors. Seeing this, many investors have turned mindful while investing and also taking deliberate steps to offload their stakes in portfolio companies.
In November, HDFC Bank shared its plans to slash about 3.21% of its stake in fintech SaaS startup Lentra, valuing it over INR 54 Cr. In the same month, private equity firm Lighthouse was reported to be selling ecommerce unicorn Nykaa’s shares worth INR 335 Cr at a discount of 2% through block deals.
Besides, global investor SoftBank was reported to sell 4.5% of its stake, a huge 29 Mn shares in the fintech major Paytm after the end of its lock-in period.
In August, cab aggregator Uber was selling 7.8% stake worth $373 Mn shares in foodtech giant Zomato via a block deal.
Besides slashing stakes in portfolio companies, it can also be noticed that startup investments have plummeted down acutely.
According to Inc42 data, funding activities in India’s startup ecosystem declined by 17% to $20.82 Bn between January and August 2022 as compared to the corresponding period last year.
