InMobi’s Naveen Tewari, other founders, to hike stake to over 50%, as SoftBank sells shares worth $250 million

InMobi CEO Naveen Tewari

InMobi founder and CEO Naveen Tewari and the other co-founders including Abhay Singhal, Mohit Saxena and Piyush Shah, are together set to increase their stake in the advertising startup to above 50 percent, from around 30 percent currently, ahead of a potential public market listing some time next year, people familiar with the developments told Moneycontrol.

How are InMobi founders increasing their stake? 

Tewari and the others are securing debt, by pledging shares and other assets, to the tune of about $350 million (around Rs 3,100 crore). Elham Credit Partners, SeaTown Holdings, Varde Partners and others are lending the money to the founder group, as per sources.

How will the debt proceeds be used?

“Of the total $350 million the founders are borrowing, $250 million will be used to buy back shares from SoftBank and the remaining $100 million or so will be used for general business operations, potential M&As and more,” one of the persons cited above said.

SoftBank and the founders are negotiating a deal that values InMobi at around $1 billion, the valuation it achieved back in 2011.

How did the InMobi bet fare for SoftBank?

“Technically, SoftBank had written off this investment in around 2016 but it has now made $250 million on a bet it took 14 years ago. So, any proceeds would be positive for SoftBank,” a second source said. “The residual stake will likely yield more returns in the future when InMobi goes public.”

SoftBank currently holds a 35-40 percent stake in the company and once the talks materialise, SoftBank’s stake would reduce to around 5-9 percent, meaning it would have sold a stake of about 20-25 percent in InMobi to its founders.

SoftBank and InMobi did not reply to Moneycontrol’s queries.