- Mithun Sacheti sold his 27.18% stake in CaratLane to Titan for Rs 4,621 crore in a mega exit deal.
- His exit comes at a time when startups across the world are facing uncertain times, with a few struggling to raise capital.
- The deal is testament to the fact that good businesses, meaningful businesses, will eventually get their due.
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Key Takeaways
- Mithun Sacheti sold his 27.18% stake in CaratLane to Titan for Rs 4,621 crore in a mega exit deal.
- His exit comes at a time when startups across the world are facing uncertain times, with a few struggling to raise capital.
- The deal is testament to the fact that good businesses, meaningful businesses, will eventually get their due.
Mithun Sacheti set up CaratLane in 2008 with a mission to sell everyday jewellery at an affordable price. He traversed uncharted territories, grew the online business from scratch, set up an offline presence, and found a partner in the Tata Group’s Titan. A few weeks ago, Titan struck a pact with Mithun to acquire his 27.18% stake in CaratLane for Rs 4,621 crore. As much as the deal surprised D-Street, it left the startup community awestruck.
Mithun’s phone rang non-stop and his inbox was filled with congratulatory messages from other founders. There is also a sense of pride among other founders because Mithun created a category-defining business, made it work, and sold it to the Tatas. How many can achieve this?
“The outcome of the deal is unimaginable, far greater than any other outcome would be,” says Mithun in an interview with Shradha Sharma. It is the second-largest exit after Flipkart founders Sachin and Binny Bansal’s stake sale to Walmart.
Mithun’s exit story deserves a lot more attention. It is a testament to the fact that meaningful businesses get their due, even when times are tough. The startup world is in a state of flux, deals are drying up, and capital is difficult to come by. Mithun’s exit is a stark contrast to the uncertainty in the market and has made investors and founders take notice.
On a fundamental level, the exit means four things:
- There isn’t a blanket winter across the startup sector. Value-creators such as CaratLane still have takers.
- Getting the product market fit right helps founders scale businesses over the long term and get a stellar return on investment.
- Indian startups can enable wealth creation for all stakeholders— investors, founders and employees.
- It’s proof for risk capital across the world that Flipkart wasn’t an outlier. BigBasket and now CaratLane prove that these exits will now be more common.
Consistency during adverse situations pays. Founders, including Mithun, have seen their share of slowdown. CaratLane launched during the 2008 global financial crisis and saw lukewarm periods. An entrepreneurship lesson that Mithun received on the job was being prepared for the long haul. It is the determination that helped him work tirelessly to achieve meaningful results, to an extent that the Tatas found it too valuable to let go of. To such an extent that CaratLane’s first investor, Tiger Global, sent the term sheet just an hour after a call.
“I always knew that this was going to be a long, hard battle. And in my mind, I also realised that I couldn’t take my customers for granted. We had to solve for their needs,” he says.
For CaratLane and Mithun, probably what worked was the fact that they were silently building, without making a lot of noise. The frugality and passion was what attracted Titan to CaratLane in 2016. “Once we were with Titan, we made sure that we just put our heads down and kept building,” adds Mithun.
Why is the exit so significant?
There are routine exits and then there is this one. The involvement of the Tata Group made it a momentous occasion, for rival founders as well as first-time entrepreneurs.
For context, the Tata Group doesn’t acquire companies mindlessly. Acquisition is a rare strategy deployed by the Tatas, and it has happened just once previously, when Tata Digital bought BigBasket in 2021.
And it is a matter of prestige to be acquired by the Tatas, because it is a reflection of real value creation. BigBasket and now CaratLane, proved to the world that the door is not shut. Mithun’s journey is proof that it is not really a distant dream.
For employees who believed in Mithun’s vision, this is their time. Reports suggest that over 70 CaratLane employees might receive between Rs 340-380 crore in ESOP payout as part of the Titan deal. It is an appropriate return for the time invested by these employees in building CaratLane. The payout also acts as a mythbuster of sorts that startup employees have minimal avenues of wealth creation.
For risk investors who have been holding on to dry powder over the past year, this exit is the proof they need to take back to their LPs that the India story can create tremendous value.
Mithun’s exit is not a success story of an entrepreneur alone. It symbolises victory for the founder and everyone else who believed in him. Often once a strategic deal happens, the clock starts to tick. Founders stay a few years and make a graceful exit. Not Mithun. He stuck around and continued to build his vision and his product.
He appears to be an underdog, but Mithun is not one. He is now a poster boy for startup exits in an uncertain world. And it is this unconventional story of beating the odds and making it happen that deserves to be celebrated.
