Steadview Capital, a leading Asia-focused alternative asset manager that makes concentrated long-term investments in listed as well as unlisted companies across multiple industries, announced that it has invested $85 million, through a secondary transaction, in SaaS major Freshworks, as it bulks up its India portfolio with yet another unicorn, Ravi Mehta, Managing Director of the London-based firm, told Economic Times.
The transaction saw Steadview Capital making its ninth investment in an Indian privately-held technology company, which is valued at more than $1 billion. The investment firm has already invested in companies like Ola, online insurance aggregator PolicyBazaar, omnichannel beauty retailer Nykaa and eyewear solutions firm Lenskart among its portfolio.
In November 2019, Chennai and San Mateo-based Freshworks had announced that it had raised $150 million in a new round of financing led by its existing investors, which valued it at about $3.5 billion. The secondary transaction by Steadview Capital involved buying out some of Freshworks’ early angel investors.
“Overall, Steadview has $2 billion invested in India including both private and public companies and is very excited about the opportunities in the country,” Mehta added.
“We also view Covid-19 as an opportunity to back our companies more strongly. We have added to three of our portfolio companies recently – Nykaa, Chargebee and Observe.ai. At the beginning of the year, we had made an investment in Freshworks. So, we have been fairly active through this period as well,” Mehta said.
“Part of the reason why we are optimistic is, if one were to look at China and the US, growth across internet and software has accelerated. In some sub-sectors such as gaming, online education, and ecommerce, penetration rates that would have been achieved in 2025 will be achieved this year. India is not any different,” Mehta said.
Mehta, who prior to launching Steadview, used to cover Asia for US-based hedge fund Maverick Capital, expects to start recording exits, primarily through the IPO route, starting next year.
“My sense is that, with regard to our current portfolio, we expect to see at least 6-7 IPOs over the next 2- 3 years. The first of our private company IPOs will likely occur in early 2021 and then we expect a portfolio company will be going public every three to four months or so thereafter,” Mehta said.
“With our ability to invest in both public and private equity, we expect to continue to support our portfolio companies at the IPOs as well as in the public markets,” he added.
Recently, Freshworks announced acquisition of Flint, a leading IT orchestration and cloud management platform, to bolster Freshservice’s IT service management (ITSM) and IT operations management (ITOM) capabilities.
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