After quitting Peak XV Partners earlier this year, its ex-managing director Piyush Gupta has launched a secondaries-focussed venture capital (VC) firm, Kenro Capital.
Gupta, who will be the founder and managing partner at the new firm, is joined by Norbert Fernandes, the former director of secondary private equity firm TR Capital Group, as a partner for Kenro.
The Singapore-based VC firm will focus on capitalising on the growing interest in growth stage secondary transactions in India and South East Asia. It will target acquisition of minority stakes in companies, across sectors, that are profitable or are near profitability, have scaled their revenues, and have plans of undertaking an initial public offering (IPO) in a span of 2-3 years, Kenro Capital said in a statement.
Kenro plans to write cheques in the range of $20 Mn to $30 Mn per investment. However, the firm didn’t disclose the size of its fund.
Inc42 has learnt that a majority of the firm’s investments will focus on the Indian market and it has already built a healthy deal pipeline.
For founders and investee companies, Kenro will provide insights and support for IPO and mergers and acquisitions.
“With impressive growth in venture capital in India and South East Asia over the past 15 years, VCs are focused on increasing the pace of distributions to their limited partners and that’s where Kenro Capital will play a key role,” Gupta said on the firm’s launch.
Gupta left Peak XV after a near seven-year stint. During his tenure at Peak XV, Gupta claims to have been part of secondary market deals such as the VC firm’s stake sale in Zomato and Mastercard’s investment in fintech Pine Labs.
Back when he left the VC firmreports said that Peak XV will work “closely with him to facilitate transactions at its portfolio firms”. Inc42 has reached out to Kenro to understand Peak XV’s role.
The development comes at a time when the number of secondary deals in the Indian startup ecosystem are on the rise. While secondary transactions allow existing investors to cash out some or all of their stake in a startup, they allow other investors to take bets on late stage companies.
The first half of this year saw secondary transactions at more than a dozen startups like Capillary Technologies, ixigo, Urban Company, Porter, and Pocket FM. Meanwhile, similar deals are afoot at startups like Lens card, Ack and OfBusiness as of now.
It is pertinent to note that Gupta isn’t the first one to capitalise on the secondary deals fad this year. In October, LC Nueva Investment Partners announced the launch of a new fund with a target corpus of INR 150 Cr (nearly $18 Mn) with a primary focus on secondary market transactions.
Earlier in May, 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.
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