Why IvyCap’s 22X exit from Purplle could make startups a viable asset class

In what is being called a “defining moment” for the domestic investor ecosystem, Indian VC fund IvyCap Ventures earned a whopping 22X return on its early-stage investment in online beauty retailer Purplle. 

IvyCap Founder Vikram Gupta believes this could change the way domestic Indian investors look at startups. Traditionally, domestic institutional investors have been wary of investing in startups, but outcomes of this kind may prompt them to view startups as a viable investment, Vikram says.

“The best part of this is that domestic institutional investors have seen this kind of returns for the first time, which will give them a lot of confidence to invest in this asset class,” Vikram told YourStory MediaFounder and CEO Shradha Sharma in a video interaction.

Watch IvyCap Founder Vikram Gupta’s full conversation with Shradha.

IvyCap partially exited the Mumbai-based D2C startup Purplle after the latter’s latest funding round of $45 million led by Sequoia Capital India, Blume Ventures, and others. 

IvyCap’s Rs 15-crore investment in Purpllegrew exponentially to Rs 330 crore at the time of its (partial) exit, a significant development for the Indian startup ecosystem as it demonstrates the kind of return on investments that one can expect from backing Indian startups. 

Indeed, as Vikram emphasises, “Something like this [a 22X exit] also gives domestic institutional investors the chance to start looking at this asset class [startups] more favourably."

The Interview

Online beauty retailer Purplle has raised $45 million in its latest funding round, which also saw the partial exit of early investor IvyCap Ventures, at an exit value of $45 million (a gain of 22X). Vikram Gupta, Founder and Managing Partner at IvyCap, talks about what the handsome exit means for domestic capital and how it could make Indian investors look at startups as a valuable asset class. 

Editor’s Pick: Product Roadmap

Finding the right electrician, plumber or beautician can be a hassle. Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra recognised this gap in the Indian home services market, and founded UrbanClap in 2014. Later rebranded as Urban Company, the startup has expanded its presence to 22 cities across India, Australia, UAE, and Singapore, and onboarded 30,000+ service partners. Read more.

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News & Updates

• IvyCap Ventures saw its Rs 15 crore investment in online beauty retailer Purplle swell to Rs 330 crore in six years. Earlier this week, the homegrown VC partially exited the startup with a 22X gain — an event it reckons will change the way domestic investors look at startups.

• India is home to 100 unicorns across sectors that are collectively valued at over $240 billion, Credit Suisse said. These unicorns are across industries, beyond technology and tech-enabled sectors as well, like pharmaceuticals, and consumer goods.

• The Indian Space Research Organisation (ISRO) said on Monday it has successfully demonstrated free-space Quantum Communication over a distance of 300 metres, for the first time in the country.

• Tech giant IBM announced the launch of 2021 `Call for Code Global Challenge', inviting global software developers and innovators to combat climate change with open source-powered technology.

• Increased economic activities have resulted in higher GST collection which stood above Rs 1 lakh crore for five months in a row since October 2020, Minister of State for Finance and Corporate Affairs Anurag Thakur said in the Rajya Sabha.

Before you go, stay inspired with… 

“Beauty as a segment is huge, with the online component being small so far. But the speed at which online has penetrated has grown substantially and will continue to grow and give much more value in the next few years.”

— Vikram Gupta, Founder and Managing Partner, IvyCap Ventures

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