India: Sequoia Capital sells stake in 8 portfolio companies to Madison Capital for $180m

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Homepage of Sequoia in October 2016

Leading venture capital firm Sequoia Capital has sold stake in eight of its portfolio companies to Madison Capital for $180 million in secondary transactions, said a Times of India report, quoting sources.

A secondary transaction refers to the buying and selling of an investor’s ownership in a privately held firm that is often backed by venture capital or private equity firms.

Madison Capital is backed by US-based Lexington Partners, which specialises in secondary transactions.

According to the sources quoted in the report, Sequoia has sold its 1.5 per cent stakw in Snapdeal along with small stakes in payments platform Pine Labs, health insurer Star Health and India Shelter Finance Corporation. It has also fully exited mobile phone manufacturer Micromax and legal process outsourcing UnitedLex.

This sale comes as a part of Sequoia’s attempts to consolidate is Indian investments and to bring in more cash into its operations.

Among the eight companies that were a part secondary sale basket, a majority of them were from Sequoia’s first three India-dedicated funds.

At present Sequoia is deploying its $920-million Fund V across India and Southeast Asia, which it raised at end of 2015.

Sequoia Capital is one of the most active venture capital firms in India with over 130 firms in its portfolio and has invested around $2 billion in the country in the last decade or so.

Sequoia had first invested in Micromax in 2010 and then in 2011 it picked up stake UnitedLex. In 2015, it acquired a 3 per cent stake in Snapdeal, as part of its deal to sell mobile wallet startup Freecharge to the e-commerce firm. Last year, Sequoia sold part of that 3 per cent holding in Snapdeal to Ontario Teachers Pension Plan.

According to the Times of India report, another India-focussed fund Kalaari Capital is also in the market for a bulk sale of its portfolio which includes Snapdeal and Urban Ladder. Another such investor is Helion Venture Partners which disbanded after a split among the partners in December 2015.

Also Read:

Sequoia Capital India in talks to sell stake in eight portfolio firms for $200m

India: Pivots and consolidation the Sequoia way