Walmart’s $16-billion acquisition of Flipkart is proving to be a boon for many of the investors in the latter who stand to rake in huge amounts following their exit from the company and Wipro chairman Azim Premji is one of them, as per a report by Madhav Chanchani in the Economic Times.
His family firm PremjilInvest, which had pumped in $25 million in Myntra - a subsidiary of Flipkart, in early 2014, will make more than $130 million from its investment.
“(PremjiInvest) had given Myntra a term-sheet at the end of 2013 and invested in it by 2014. They were one of the only players willing to take the risk at that time,” an investor who was a part of the discussions at the time told ET.
Flipkart, which had acquired Myntra in a stock transaction a few weeks after the investment in 2014, was valued at around 1.6 billion at the time. It’s net worth rose to $15.2 billion by 2015.
After backing Myntra, PremjiInvest picked up a stake in Snapdeal for Rs 152 crore, which valued the online marketplace at almost $1 billion.
PremjiInvest started in 2006 and manages at least $3 billion of assets primarily in public markets, making it the largest family office in the country, the report says.
“PremjiInvest is an exception in this entire game. They are looked at as a fund and not a family office as they do large cheques. Their approach has been more early-growth private equity investor than a venture capital investor,” said Karan Sharma, co-head of the digital and tech vertical at investment bank Avendus Capital.
While PremjiInvest has been able to reap successful returns in financial services, it has a mixed record in retail. In 2008, the film invested 230 crores in discount retailer Subhiksha, which wound up a few months later due to financial mismanagement. On the other hand, its investments in retail chains, Future Lifestyle Fashion and FabIndia are still going strong.
PremjiInvest also has stakes in online eyewear retailer Lenskart as well as financial services platform Policybazaar, which could be worth at least $1 billion following an investment from Softbank.
In June last year, the firm also invested in Fireside Ventures - a venture capital fund of former senior MD of Helion Venture Partners, Kanwaljit Singh.