Asia-focused secondaries investor Foundation PE acquires venture portfolio in India

Singapore-headquartered Foundation PE, an Asia-focused secondaries investor, has acquired the entire limited partner (LP) interest in Bengaluru-based Prime Venture Partners’s Fund 1, via an LP tender offer process.

This marks the first announced deployment of Foundation PE’s maiden fund. The firm was launched in 2017 and is still in the midst of raising $250 million for the debut secondaries fund.  DealStreetAsia understands that Foundation PE has done at least one other transaction, in China. 

Prime Venture’s 2012-vintage fund, which closed with $8 million in commitments from institutional investors and individuals, has seven companies in the portfolio. 

They include Quizziz, an edtech startup that recently drew US investor Tiger Global Management into its Series B funding round; Waggle, a US-based pet wearables startup; and enterprise software company Happay, which was recently acquired by credit card bill payments platform Cred. Prime Ventures’ Fund 1 is still invested in these companies.

The LP interest was acquired at a discount to net asset value, but even so the existing investors made at least 4x of what they had put in, Foundation PE co-founder and partner Jeremy Foo told DealStreetAsia. 

Following the transaction, the fund will be extended for another four years, during which time Prime Ventures, as the GP, will work towards a full exit of the portfolio companies. Foundation PE will be the sole LP in the fund. 

“Now there’s more time to realise proper exits,” Foo added. “There’s a three-four year horizon in which they can continue to give time for these companies to grow.”

“We could have had the option of going and requesting [an extension] from LPs, but we were exploring other options to find a friendlier structure,” said Sanjay Swamy, co-founder and managing partner of Priven Advisors, advisory to Prime Ventures. “[With Foundation PE We discussed putting together an offer for the LPs that gives them high quality returns and a clean exit, while continuing to allow [Prime Ventures] to support the portfolio companies.”

Meanwhile, Prime Ventures’s fourth fund with a target corpus of $100 million, is largely closed, Swamy said, adding that demand is prompting the GPs to consider an expanded corpus.

Globally, secondaries transactions are projected to have hit $100 billion in 2021, outpacing the $62 billion in 2020, and about $85 billion the year before.  

And, global investors are showing increasing interest in the Asian secondaries market. Last April, Temasek-backed venture capital firm Vertex Ventures divested its second Southeast Asian and Chinese funds to Liechtenstein-based group LGT. 

Other secondaries-focused Asian investors include Hong Kong-based TR Capital and NewQuest Capital Partners, which closed its fourth secondaries fund at $1 billion in November 2019. 

Foundation PE, which has the backing of European asset manager Tikehau Capital, focuses on mid-market opportunities, with deployments going up to $75 million, across LP interests, single-asset GP stakes, and other structures.

Foo noted that while there have been more secondaries opportunities in India and China given the comparatively more mature ecosystems, he is seeing prospects in Southeast Asia as the first funds reach the end of their fund life. “We are starting to see a lot of GPs starting to have conversations with us, as their LPs are looking for liquidity.”

“I think in the early days, [secondaries] used to be a bit stigmatised, it used to be like an indictment of the [GP’s performance]. So GPs would avoid these situations. But as [secondaries] become more and more common, there’s a way to provide liquidity, and it’s not an indictment of your performance.”

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.