Silicon Valley-based VC firm Tribe Capital has partnered with homegrown investment firm Oister Global to launch its first alternative investment fund dedicated to secondary transactions in the Indian startup ecosystem.
Named ‘Oister Tribe Ace Fund 1’, the fund will have a target corpus of $500 Mn for secondary deals of Indian startups. The corpus would be deployed in the next two years, the companies said in a joint statement.
The fund will operate under Tribe Capital India, the India arm of the US-based VC firm, launched earlier this year. In April, Tribe Capital roped in Shiprocket cofounder Vishesh Khurana to lead its maiden Indian fund. Khurana joined First Unicorn Capital’s founder and CEO Raj Snehil Juneja, who is the managing director at Tribe Capital India.
Commenting on the launch of the fund, Juneja said, “The Indian private equity and venture capital sectors are ripe for secondaries, with increasing numbers of investors seeking to monetise their positions. In the first half of 2024, 62% of startup deals valued between $50-500 Mn were secondary transactions or buyouts. As companies with strong unit economics prepare for potential IPOs, we expect demand for secondaries to soar.”
The development comes at a time when the Indian secondary market is attracting interest from several VC firms and industry leaders. For instance, former Peak XV Partners managing director Piyush Gupta has set up a secondary-focussed fund, which intends to work closely with Peak XV to facilitate secondary transactions involving the latter’s portfolio companies.
Similarly, asset management company 360 ONE Asset launched INR 4,000 Cr Special Opportunities Fund-12 to invest in late-stage startups. The company claimed that it is India’s first alternative investment fund (AIF) dedicated to the private equity secondary market.
“Secondaries will be the tipping point for qualified investors to enter private markets, just as IPOs have revolutionised access to public markets,” said Sandeep Sinha, co-CEO of Oister Global, on the new fund.
It is pertinent to note that the Indian startup ecosystem saw more than a dozen secondary deals in the first half of 2024, with several early investors exiting from startups such as Capillary, ixigo, Urban Company, Porter, Pocket FM, among others.
Many of these deals came at a discount, offering new investors a lucrative entry point. Meesho is also reportedly in talks for a funding round, which would be a mix of primary and secondary transactions. The ecommerce unicorn would be valued 20% lower than its valuation in the previous funding round.
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