StrideOne, a non-banking financial company (NBFC) formed by the founders of venture debt firm Stride Ventures, is in late-stage talks to acquire LetsVenture, an investment platform with portfolio startups including Scripbox and Blu Smart Mobility, people aware of the development told Moneycontrol.
The deal is expected to happen in three stages, the people said. First, there will be a 26 percent divestment of LetsVenture involving an equity sale and a small component of cash. This will be followed by approvals from the Securities and Exchange Board of India and then a 100 percent acquisition.
LetsVenture has a SEBI-regulated angel alternative investment fund structure to bring all investors in as one entity on the cap table.
StrideOne is expected to infuse more funds in LetsVenture after the acquisition.
“There are a lot of strategic synergies between the two firms. StrideOne is trying to democratise ecosystem financing for new-age businesses. Apart from providing credit to the ecosystem players, through LetsVenture, they will get the opportunity to access a massive funnel of investment firms and investors to fund its ecosystem of startups. There are many areas of synergies being discussed,” one of the people said.
LetsVenture and StrideOne declined to comment on Moneycontrol’s emailed queries.
Deal size unknown
The acquisition could help StrideOne work closely with the investors and startups on the LetsVenture platform and offer financing solutions, its primary business. The deal is expected to close later in August, the people added, requesting anonymity. The deal size could not be ascertained at the moment.
Founded in 2013 by Shanti Mohan and Sanjay Jha, LetsVenture is an online investment platform connecting early-stage startups, angel investors and prominent institutional investors. It has a network of over 18,000 investors and 34,000 startups and has helped startups raise more than $143 million across over 170 follow-up deals.
LetsVenture is backed by investors such as Ratan Tata, Nandan Nilekani, Mohandas Pai, Rishaad Premji, Shaadi.com co-founder Anupam Mittal, Freshworks founder Girish Mathrubootham, Snapdeal’s Kunal Bahl, and PhonePe founder Sameer Nigam. It counts venture capital firms Chiratae Ventures and Accel Partners among its backers.
Expanding financing business
StrideOne is focussed on offering customised financial services products to micro, small and medium enterprises (MSMEs) and supply chain partners of startups. The acquisition will help StrideOne to create more products, which will help fill the credit and non-credit financial need gaps of startups and MSMEs, the people said.
The NBFC last raised Rs 250 crore in May 2022 through equity led by Elevar Equity and debt from some Indian banks.
LetsVenture’s main revenue model involves charging a 2 percent fee from investors and a 1-2 percent fee from startups, and a 5 percent carry on every deal, the people said. A carry or carried interest is a fee charged as commission or compensation by a fund manager on the profit made on the startup investment.
LetsVenture’s portfolio startups include Scripbox, Blu Smart Mobility, Jar, Agnikul, Chingari, Leverage Edu, Thinkerbell Labs and Zypp Electric.
According to LetsVenture’s income statement accessed from Tracxn, it clocked revenue of Rs 23.63 crore in FY22 and net profit of Rs 46.6 lakh compared with Rs 6.04 crore revenue and a net loss of Rs 4.39 crore in FY21.
LetsVenture also offers other services to members on the startup and investor sides, including learning and upskilling courses, mentorship programmes through a product called Scalix, and an end-to-end investments and ESOPs management platform called Trica.
This will be the second time an angel and investor network platform is getting acquired this year. In January 2023, Mumbai Angel Network (MAN) was acquired by 360 ONE (formerly IIFL Wealth and Asset Management) for Rs 45.73 crore.
There too the idea was to get access to more investment opportunities and tap into each other’s investor network. MAN and 360 ONE had then jointly announced two new funds – an angel fund of Rs 1,200 crore and a venture capital fund of Rs 500 crore.
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