Moneyball Strategies: How Discounts Are Transforming the Secondary Market for Indian Startups

Moneyball Strategies Driving Discounts in Indian Startup Secondary Market

The festive season heralds not just ecommerce discounts but also considerable markdowns in the prices of Indian startups available in the secondary market. This discounts season has seen a wave of secondary deals allowing investors to secure exits from companies like Capillary, ixigo, and others.

Impact of Discounted Secondary Deals

• More than a dozen secondary transactions occurred in the first half of the year.
• Many startups are executing deals with valuation cuts exceeding 20%, notablyMeesho.

The Emergence of Secondary Funds

New secondary funds are springing up to capitalize on this trend. Piyush Gupta, former managing director at Peak XV Partners, has launched a fund aimed at facilitating these transactions, working closely with startup portfolios. Similarly, 360 ONE Asset's INR 4,000 Cr Special Opportunities Fund-12 targets late-stage startups, claiming to be India’s first dedicated AIF for private equity secondaries.

New Dynamics for Limited Partners

• LPs are increasingly drawn to micro VCs and tighter investment models.
• Investors are eyeing returns through accelerated exit routes, from secondary deals to potential SME IPOs.

In summary, the entry of new players in the VC landscape is reshaping how investments in Indian startups function during this discounts season, highlighting exits for angel investors and evolving expectations around liquidity.