Matrix Partners exits women’s apparel brand W

Delhi-based TCNS Clothing Company Pvt. Ltd, which owns the women’s apparel brand W, has scooped up $140 million in funding from US-based private equity firm TA Associates.

With this new investment coming in, Matrix Partners India took a full exit from W. Matrix Partners India had, in 2011, invested Rs 60 crore in the company for a minority stake and a total of Rs 90 crore in both primary and secondary capital.

Matrix Partners India is an investment firm with Rs 4,500 crore under management. It invests in the Indian consumer market at the seed, early and early growth stages. Centre for Sight, Chumbak, Cloudnine, Ola, Quikr, Practo, Stayzilla, Limeroad, Dailyhunt, Housejoy and Mswipe are some of the portfolio companies of Matrix Partners India. Through its global network of funds, Matrix Partners invests in the US, China and India, with $4 billion under management.

Apart from this new portfolio company W, TA Associates has invested $45 million in mobile handset maker Micromax in 2010, acquired a minority stake in online payment service provider, BillDesk in 2012, and exited Idea Cellular. As reported by VC Circle, the PE firm made Rs 900 crore on its investment of Rs 421 crore in Idea Cellular in 2006.

TA Associates last year made an investment in SaaS-based hospitality and travel technology solutions provider, RateGain.

Growth Curve of TCNS Clothing

Founded in 2002, TCNS Clothing entered retailing by setting up its first store in Delhi. The company now designs, manufactures and sells contemporary ethnic wear, targeting women between the ages of 25 and 40.

TCNS owns three fashion apparel brands-W, Aurelia and Wishful, which are present in more than 1,600 points of sale across more than 100 cities in India, Mauritius, Sri Lanka and the Middle East, and in over 300 exclusive stores and several large multi-brand retailers and online portals. Having achieved consumer sales of more than $120 million in 2016, TCNS Clothing is growing at a rate of 70 percent year-on-year.

The company claims that W is the first Indian women's brand to have more than 200 stores, and Aurelia is available through more than 100 stores. 

TCNS Clothing Company CEO Anant Daga said, 

Apart from organic growth, we see significant avenues for expansion through the possible introduction of additional womenswear brands and complementary offerings, as well as expansion into additional international markets. With TA’s experience in consumer sectors and fashion verticals, we believe this partnership will add value across all strategic and operations spheres.

The exit scenario

According to a report by Venture Intelligence, Private Equity exits in India surged by 103 percent during the calendar year 2015, hitting $8.9 billion across 236 deals. $6.9 billion out of the total $8.9 billion represent complete exits, with the rest being partial ones. The exit value in 2015 has surpassed the exit value of 2010 (worth $6.3 billion across 195 deals, the previous record high).

With 53 exits worth about $3.2 billion, Information Technology and IT-Enabled Services (IT & ITES) portfolio companies topped in terms of both exit value and volume during 2015.

Helion Ventures exited Flipkart with a multiple return of 16.74x, ChrysCapital took an exit from Mankind Pharma (13.13x), Tiger Global exited from JustDial (13.12x), Carlyle exited from Elitecore Tech (11.86x), Matrix Partners from Cloud Nine (7.00x) and Bessemer from Indian Energy Exchange (7.00x).

Shailesh Vickram Singh, Executive Director of Seedfund, in an earlier interaction with YourStory said that consumer Internet companies, including Flipkart, Paytm, Voonik, Ola, and Snapdeal, among several others, are likely to provide exit opportunities to their investors in the next four years.

After the successful IPOs of tech startups like Info Edge, MakeMyTrip, Justdial and Infibeam, the next four years could probably see 20 companies (a mix of consumer Internet and B2B companies) going for IPOs.