Early investors in India’s ecommerce make big gains

PE investors like Kalaari Capital, Accel Partners, who remained invested in e-commerce platforms such as Snapdeal, Flipkart, are already raking in profits. The buzz is that Bangalore-based venture fund Kalaari may execute a secondary sale of shares worth 100 million dollars (over Rs 610 crores) in Delhi-based Snapdeal. Early investors in Flipkart, like Accel Partners, has part-sold their shares in a 150 million dollars (about Rs 910 crores) round.

A secondary sale is when an existing investor sells shares to a new one or the promoter at the company's current valuation. One of the first investors in Flipkart back in 2009, Accel, had invested around a million dollars (around Rs 6 crore) in the company, which is now valued at over 10 billion dollars (over Rs 60,000 crores). Kalaari, which first invested in the e-tailer as IndoUS Ventures, has put in 25 million dollars (around Rs 150 crores) in Snapdeal over the past 5 years and holds around 14 percent stake in the online medium.

There are estimated around 100 VCs operating in India, however, seven out of them are the most active. According to Venture Intelligence, a research service that compiles private investment data, these seven VCs account for 222 of the 414 investments or 54 percent that have materialised in the e-commerce space since 2007. These seven investors own a majority of investment in India's top 15 e-commerce companies, individually or with other VCs. Tiger and Accel together own 53 percent shares, while IDG Ventures and Kalaari have a combined stake of 28 percent in Myntra. In Flipkart, the two common investors (Tiger & Accel) together hold around 40 percent stake.