India Quotient, an early stage investment firm, is looking to make a partial exit from vernacular social media startup Sharechat. The firm is selling its stake worth INR 50 Cr in Sharechat, which will give it a neat 25-30X return on its initial investment.
Reportedly, around 1-2% stake has been picked up by China’s Hillhouse Capital.
Founded by IIT-Kanpur alumni, Farid Ahsan, Bhanu Singh and Ankush Sachdeva, in October 2015, Sharechat allows users to create, discover, and share content with each other, much like people do on Tumblr and Instagram.
The move comes after a $100 Mn investment in Sharechat by Shunwei Capital, Morningside Ventures of China, and Jesmond Holdings, an affiliate of Russian billionaire Yuri Milner’s DST Global, valuing the company at $460 Mn in September 2018.
This is a 7X increase from its last valuation when Sharechat raised $18.2 Mn in a Series B funding round from Xiaomi Singapore and its sister company Shunwei Capital at a valuation of $67 Mn (INR 431 Cr) in January 2018.
“Nobody believed that Indian entrepreneurs can build a social media company, let alone freshers without any pedigree straight out of college. But they have been able to build a property which is competing with Facebook and Twitter,” India Quotient’s founding partner Anand Lunia told ET.
India Quotient continues to hold an around 5% stake in Sharechat, which is worth over INR 165 Cr right now. “With this exit, India Quotient has returned more than half of its second fund, which counted SIDBI’s fund of funds as its largest backer,” the media report added.
India Quotient has till now raised $23 Mn across two funds, backing a total of 40 companies. Its first fund worth $5 Mn was closed in 2012, while the second fund of $18 Mn was closed in 2015.
In April 2018, India Quotient announced the first close of its $50-$60 Mn new fund, raising more than $30 Mn from investors such as the Gulf-based billionaire of Indian origin, Dr BR Shetty, other HNIs, and institutions such as the government of India’s SIDBI.
The fund expects to reach a final close in the next six months. The India Quotient team is further looking to invest in areas such as networks, healthtech, as well as solution-based companies that address a mass market problem.