MC EXCLUSIVE IPO not an exit; invested in pre-offer rounds of Urban Company, Bluestone: Prosus India's Ashutosh Sharma

Sharma stressed that listing is not an exit for Prosus, which continues to buy into companies like Bluestone and Urban Company

Consumer tech firm Urban Company launched its Rs 1,900-crore initial public offering (IPO) on September 10, the third company from the India portfolio of Prosus, the global consumer internet business of Naspers, to go public in the past 12 months.

In an interview to Moneycontrol, Ashutosh Sharma, head of India ecosystem at Prosus, said listing is not an exit for the company, which continues to buy into firms such as Bluestone and Urban Company. He also shared the firm’s approach to IPOs, long-term investing, and India’s evolving public markets. Edited excerpts of the interview:

How's the mood in your office with Urban Company IPO coming up?

It's been a good year. Last year we had Swiggy, then a couple of weeks back Bluestone and now hopefully Urban Company. All that is exciting but we’ve also been busy on the investment side. We wrote three large cheques — $80–100 million each — in the past year. We entered new sectors, especially financial services, where we hadn’t done much before. We also did multiple early-stage deals, largely around artificial intelligence (AI).

It’s been a mix of India-headquartered companies and US firms with strong engineering teams in India. Some are product (companies), some services, some consumer-facing, and many building infrastructure for other businesses, so B2B as well. We’ve gone from financial services, one of the oldest industries, to artificial intelligence, the newest frontier.

So, you haven’t been sitting on the sidelines, waiting to see how tariffs play out?

Not at all. At Prosus, we’re fortunate to take a long-term view on regions. If you assess India from a 10–25 year lens, then tariffs or mid-term geopolitical shifts matter less. Over the long term, if the country keeps growing, there’s plenty of appetite for the areas we invest in.

If you look only at a three–four year horizon, you’ll worry about entry valuations or politics turning against you. That can push investors to wait on the sidelines. For us, it’s less relevant.

The Urban Company IPO is your third in less than 12 months. What have been the learnings in preparing companies for the public market?

Listing is an important milestone but it’s not the end. We didn’t sell a single share in Bluestone and we’re not selling in Urban Company. In fact, we bought in both pre-IPO rounds.

The first big learning is that these are new, nuanced businesses. There are no 15–20-year-old comps (companies) in India’s public markets. So when new shareholders come in, there’s a period of education. It starts with basics — what the product is, why there’s product-market fit, who the competitors are. Then it goes deeper, the growth levers, the profitability levers, how they’ve evolved, and how they’ll look three years out. That education is critical.

For something like Urban Company, there’s no global equivalent. Foreign investors haven’t seen this model. They may have seen food delivery, but not a service where you can book a haircut or a plumber on demand. You need to explain where the supply comes from, how it’s trained, how quality is ensured in such a non-standard business.

The second big shift is for founders and management. They go from dealing with a handful of investors to thousands, not quarterly but almost daily. Managing expectations becomes a full-time responsibility. There’s no playbook; you learn from peers who’ve gone public.

The third is balancing long-term ambition with the short-term results the market expects; that’s a new skill founders need to pick up. Beyond that, of course, there are the mechanics of working with bankers and exchanges but those three behavioural changes stand out.

What factors go into deciding the timing of an IPO for a VC-backed company?

For us, listing isn’t an exit, we rarely sell in an IPO. Exit pressure is a smaller driver because India has a robust secondary market. Anyone who needs liquidity can usually find a buyer. For example, since our initial investment in Urban Company in 2021, we’ve mostly bought secondary shares because the company was profitable and didn’t need fresh capital.

The real driver is business maturity. Public markets value predictability. If a company is still juggling priorities and hasn’t identified its core, it’s not ready. Once the business matures, becomes predictable and can handle scrutiny, then it’s a good time.

Public markets also offer benefits private ones don’t, like faster fundraising, better value discovery because of liquidity, easier secondaries, and even a brand-building halo for consumer companies.

How have you seen domestic investors evolve since the tech IPO boom of 2021?

It’s been a natural maturing process on both sides. These are new business models, so the onus is on companies to educate investors. As more tech firms list, as coverage expands, and as investors spend more time with them, understanding improves.

Think of it as a four-year-old child learning to walk, sometimes falling, sometimes getting up. The Indian market is still young compared to the US or China, where investors have decades of experience with tech. With time, investors here will appreciate the nuances of these businesses.

In today’s environment, what kind of tech companies are public markets ready to accept?

Investors in India are savvy; they’ve seen many cycles. Historically, they valued profitability and distribution strength, companies with deep supply chains reaching tier-2 and rural India.

For new-age tech, profitability is still valued but there’s more acceptance that some growth-focused companies won’t be profitable yet. Education plays a role here. If you can show a clear path to profitability, it helps.

Another shift is recognition of new types of moats. Distribution used to be the biggest moat. Now network effects in marketplaces are being appreciated and even rewarded with premium valuations.

How many more companies from your portfolio are ready to go pubic over the next 12–18 months?

Many are mature enough to list if they choose to. But in most cases, we’re not the only shareholder, and the decision rests with the board and founders. So while several are ready, how many take the plunge will depend on them.

Are you seeing a shift in founder mindset, from building to sell, to building for the long term and going public?

Absolutely. It’s less a mindset shift and more that the possibility has become real. Passionate founders almost always want to keep building. Earlier, the option to list and continue wasn’t real. Now it is. That makes a huge difference. Those are the kinds of founders we love to partner with, since we also invest for the long term.

Do you personally track grey market premiums?

Selfishly, yes. It gives me a dopamine hit. But beyond that, I don’t see much value in it.