Info Edge Clocks 36% Return On Startup Investments

Naukri.com parent Info Edge's long-term bets on Indian startups ranging from Zomato to Policybazaar, are yielding blockbuster returns of nearly 10 times and an estimated gross internal rate of return of 36 per cent, according to the firm's FY25 annual letter to shareholders.

The firm, helmed by Sanjeev Bikhchandani -often referred to as India's Warren Buffett - invested a total capital of Rs 3,959.16 crore across platforms over the last one and half decade. This investment today stands at the Fair Market Value (FMV) of Rs 36,855 crore.

"Since we started our financial investing activity in 2007, we have achieved an estimated 36 per cent gross IRR across all vintages put together," founder and vice chairman Sanjeev Bikhchandani wrote in the letter.

Info Edge was one of the early backers in homegrown listed companies, including Zomato and Policybazaar. It invested a total of Rs 483.78 crore and Rs 591.40 crore in the two companies, respectively. The value of its shareholding in both the companies is collectively more than Rs 31,500 crore.

Zomato and Policybazaar's combined market capitalisation stands at more than Rs 2.5 lakh crore.

After these, Info Edge invested in startups, including men's grooming brand Ustra, B2B ecommerce platform Shopkirana, edtech platform Adda247, omni channel inter-city bus travel platform Zingbus, travel tech platform ixigo, among others.

To date, it has backed 111 companies.

In 2019, it rolled out a SEBI-registered AIF venture capital fund, Info Edge Venture Fund. Spread over three funds, it has a total corpus of Rs 3,422.94 crore, out of which Info Edge has committed Rs 1,613.75 crore.

"We first started investing in early stage technology startups around 18 years ago in 2007. This investing activity today contributes to an estimated 30-40 per cent of the value of the company if analyst reports are to be believed - second only to the contribution of Naukri.com," he wrote.

Value creation through investing in tech-led and tech-enabled startups is scalable, sustainable and repeatable, he said, adding it gave the firm an edge as a tech operating company that very few others have.

Bikhchandani founded Info Edge, one of India's oldest internet-based companies, in 1995. It operates across sectors such as recruitment (Naukri), real estate (99acres), matrimony (Jeevansathi) and education (Shiksha).

Info Edge's journey as a financial investor has played out over four distinct phases, beginning with its earliest bets between 2007 and 2012 - a period that laid the foundation for two of its biggest wins.

"The first phase was from 2007 to 2012. Zomato and Policybazaar have been breakout successes of this period from over half a dozen investee companies," he said. "The second phase was from 2012 to 2015. We treaded cautiously in this period as the winners from Phase 1 were yet to emerge." The third phase was from 2016 to 2019 once it had become clear that Zomato and Policybazaar would be winners. "Companies that we invested in during this period include Adda247 and Shipsy among others. These are all companies at varying stages of maturity, but we remain optimistic that some of these will emerge as multi-baggers for us," he said.

Several of these companies have gone on to raise investments at higher valuations from reputed investors like Westbridge Capital, Google, Peak XV Partners, A91 Partners, etc. Most of these emerging winners are well capitalized with years of runway to execute and hopefully list on the public markets.

"The fourth phase of our early stage investing journey began in 2019 when we decided to set up a venture capital fund, namely Info Edge Venture Fund (IEVF) in the form of a SEBI-registered AIF vehicle. We have since invested through three different funds (i.e., IEVF, Info Edge Capital and Capital 2B) across four schemes," he said.

Besides Info Edge's commitment of Rs 1,613.75 crore to these funds, MacRitchie Investments Pte Ltd (an indirect wholly-owned subsidiary of Temasek Holdings ) has also committed Rs 1,593.75 crore.

"Apart from the AIF funds, we also began to invest with a small pool of money in early stage deep tech companies through a wholly-owned subsidiary of Info Edge named Redstart Labs (India) Ltd," he said.

"While the AIF vehicles are still relatively nascent (early stage investing usually needs 7-8 years for promising companies to achieve meaningful scale in revenue and market share), several portfolio companies are already showing early promise with strong revenue growth, breakeven/profitability, leadership in their space and follow-on funding led by new external investors." Portfolio companies such as TrueMeds, Geniemode, Attentive.ai, Aftershoot, Mirana, Osfin, InPrime, among others, have received follow-on investments from investors like Accel, Peak XV, Matrix, Westbridge, Tiger Global, Multiples PE, Fundamentum, Vertex, Left Lane and others.

Moreover, the largest investment of Info Edge Capital, Bluestone Jewellery and Lifestyle Pvt Ltd has received follow-on investment from Prosus (Naspers group), Peak XV and Steadview Capital, and has already filed its Draft Red Herring Prospectus with SEBI for an IPO in the coming months.

"We have invested in 111 companies across the years, not including investments in startups in the spaces that Info Edge has operating businesses. Out of these, 76 companies have institutional co-investors/follow-on investors," he added.