The funding took place about 3-4 months ago, the report added. The funds will help the company pursue growth opportunities.
With this reported transaction, True North would hold a 36 per cent stake in Bengaluru-based Cloudnine. The company has also mandated investment bank Avendus Capital to arrange a larger funding round of $20-25 million that could be a precursor to a public issue.
True North, formerly called India Value Fund Advisors (IVFA), had invested Rs.400 crore for a minority stake in Cloudnine Hospitals in December 2015, giving a partial exit to Matrix Partners India. The hospital chain had raised Rs.100 crore ($16 million) in its second round led by Sequoia India and Matrix in 2013. Matrix had invested Rs.45 crore in the company in 2011 as well.
On raising a larger funding round, quoting Cloudnine’s co-founder and managing director Rohit MA, the report said, “The discussions are in a good stage with a select set of prospective investors, which have remained in close contact with the company over the years and are aware of the achievements, ambitions and opportunities in this sector,” he said.
Founded in 2007, Cloudnine is operated by Kids Clinic India Pvt. Ltd. It is currently present in over 20 locations across seven cities – Bengaluru, Chennai, Mumbai, Pune, Gurugram, Noida and Chandigarh. It has planned projects in other cities, too.
The private equity firm was recently in the news for looking to sell its majority stake in food ingredients company VKL Seasoning. Last week, True North secured approval to acquire a 17.4 per cent stake in the financial services unit of Federal Bank for Rs 168.6 crore (about $23.5 million). Two days earlier, it signed an agreement to acquire a 75 per cent stake in Shree Digvijay Cement Company Ltd from Brazilian cement major Votorantim Cimentos. In May, the firm had agreed to acquire a 26 per cent stake in FedFina.
True North, started as IVFA in 1999, has launched six separate investment funds with a combined corpus of over $2.8 billion including co-investments. The firm raised $600 million for its latest fund, Fund VI, in August. In the past 19 years, the private equity firm has invested in more than 40 Indian businesses.