In what is being called a “defining moment” for the domestic investor ecosystem, Indian VC fund IvyCap Ventures earned a whopping 22X return on its early-stage investment in online beauty retailer Purplle.
IvyCap Founder Vikram Gupta believes this could change the way domestic Indian investors look at startups. Traditionally, domestic institutional investors have been wary of investing in startups, but outcomes of this kind may prompt them to view startups as a viable investment, Vikram says.
“The best part of this is that domestic institutional investors have seen this kind of returns for the first time, which will give them a lot of confidence to invest in this asset class,” Vikram told YourStory Founder and CEO Shradha Sharma in a video interaction.
IvyCap partially exited the Mumbai-based D2C startup Purplle after the latter’s latest funding round of $45 million led by Sequoia Capital India, Blume Ventures, and others.
IvyCap’s Rs 15-crore investment in Purplle grew exponentially to Rs 330 crore at the time of its (partial) exit, a significant development for the Indian startup ecosystem as it demonstrates the kind of return on investments that one can expect from backing Indian startups.
Indeed, as Vikram emphasises, “Something like this [a 22X exit] also gives domestic institutional investors the chance to start looking at this asset class [startups] more favourably.”
Online beauty retailer Purplle has raised $45 million in its latest funding round, which also saw the partial exit of early investor IvyCap Ventures, at an exit value of $45 million (a gain of 22X). Vikram Gupta, Founder and Managing Partner at IvyCap, talks about what the handsome exit means for domestic capital and how it could make Indian investors look at startups as a valuable asset class.
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“Beauty as a segment is huge, with the online component being small so far. But the speed at which online has penetrated has grown substantially and will continue to grow and give much more value in the next few years.”