By Ettech Last Updated
Copyright indiatimes
At-home services platform Urban Company’s Rs 1,900-crore initial public offering (IPO) and the surge in its stock price post listing delivered significant gains for early backers, including Elevation Capital, Accel, and Bessemer Venture partners, with growth-stage investors such as Prosus and Tiger Global also reaping paper profits.While existing shareholders sold stocks worth Rs 1,422 crore under the offer-for-sale (OFS), the 58% listing jump in the company’s stock price on Wednesday further boosted the value of their remaining ownership.The stake of Vy Capital, the largest shareholder with 10.1% of the stock, is valued at around Rs 2,424 crore, excluding the Rs 216 crore it raked in through the OFS. Venture capital firms Elevation Capital and Accel, the firm’s earliest backers, are sitting on return multiples of over 30X on their decade-old investments. Accel invested a total of Rs 70-75 crore across various funding rounds. It sold shares worth Rs 390 crore through the OFS, and its post-IPO stake is worth around Rs 1,700-1,800 crore. It also sold shares worth Rs 87.1 crore to Prosus in a pre-IPO secondaries round. It has diluted some of its stake through secondary transactions in the past as well.“The company is profitable, so there’s only so much primary capital it can absorb. It’s not that we were eager sellers… our priority was simply to ensure the company reached this milestone. Out of that compulsion, we did participate in the OFS, but we’re very happy with the company’s performance and want to remain invested for the long haul,” Accel partner Abhinav Chaturvedi told ET on the sidelines of the company’s listing ceremony in Mumbai.Similarly, Elevation Capital has invested around Rs 170-175 crore in the company, including a Rs 74 crore stake it picked up from Tiger Global in a pre-IPO secondary transaction. The VC firm sold shares worth Rs 346 crore via the OFS, while retaining stake worth around Rs 1,900-2,000 crore.Another early investor, Bessemer Venture Partners, first backed Urban Company in its series B fundraise in late 2015 and has invested a total of Rs 90-95 crore across rounds. It divested shares worth Rs 173 crore in the IPO, and retains a stake that is now worth Rs 1,200 crore.Prosus, which has so far invested around Rs 1,200-1,300 crore across various tranches, including a pre-IPO secondary round, is now sitting on shares worth around Rs 1,700-1,800 crore. The South African and Dutch technology group, which first backed Urban Company in 2021 for approximately 3.5% stake, has increased its shareholding to over 7%. It has not yet sold any shares in the firm.Speaking to ET, Ashutosh Sharma, head of India ecosystem at Prosus said the investor, which has had Indian portfolio companies such as Swiggy and BlueStone go public, was under no pressure to show exits. Prosus did not sell shares in the BlueStone IPO, and trimmed its stake in Swiggy to avoid being termed a promoter per market regulator Sebi’s rules.“We’re not a fund, so we’re not under pressure to show exits…That gives us the flexibility to stay invested for the long term. We’re extremely bullish on India. I can’t predict what will happen with tariffs tomorrow, next week, or how geopolitics will play out in the short or medium term… but if you take a long-term view of the country, it’s clear that India has all the ingredients needed to sustain rapid growth,” Sharma said. Two other Prosus portfolio companies, Meesho and Captain Fresh, have filed confidential draft papers with Sebi for their IPOs.Urban Company’s founders Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra, who sold Rs 780 crore worth of shares through secondary deals in the run-up to the IPO, currently hold 6.45% stake each in the startup worth Rs 1,500-1,600 crore.
