Deals Buzz: Alibaba hits pause on fresh India investments
In other news, several Indian family offices are coming together to form a consortium to make investments on their own, driven by a lack of consistent returns and high management fees in private equity (PE) and venture capital (VC) funds.Updated: Aug 26, 2019 10:21 IST
Mint brings you your dose of the top deals news, reported from newsrooms across the country.
Alibaba hits pause on fresh India investments
Alibaba Group Holding Ltd, one of the biggest investors in Indian startups such as Paytm and Zomato, is temporarily halting fresh investments in the country as the Chinese e-commerce giant reviews its India strategy, Mint reported citing four people aware of the development. Alibaba’s four-member investment team in India led by Raghav Bahl, who was appointed last August from Bessemer Venture Partners, has been mandated to currently manage only the existing portfolio and they are no longer scouting for deals actively as they were before. Billionaire Jack Ma-led Alibaba has made wide-ranging investments in Indian startups. Its portfolio includes payments firm Paytm and its e-commerce arm Paytm Mall, food delivery startup Zomato, online grocer BigBasket, online retailer Snapdeal and logistics firm Xpressbees. Alibaba has still to exit any of its investments in India, unlike other late-stage investors such as SoftBank,Tiger Global, Naspers and Tencent, which, after raking in billions of dollars from the $16 billion acquisition of Flipkart by Walmart last year, have become very active in the domestic market once again.
Family offices tie up to make direct PE, VC investments
Driven by a lack of consistent returns and high management fees in private equity (PE) and venture capital (VC) funds, several Indian family offices are coming together to form a consortium to make investments on their own, Mint reported. The proposed ‘Family Office Consortium’ is the brainchild of Waterfield Advisors Pvt. Ltd, a multi-family office and advisory firm started in 2011 by Soumya Rajan, a former Standard Chartered banker. “As a first step, 20 families who are active in the alternative investment space are engaging with each other to discuss and debate the best manner of collaboration,” Rajan told Mint. For now, each family office will act as an “investment manager” for the deals that they are leading, with Waterfield Advisors helping to facilitate the sharing and exchange of information between participating families. This may morph into a more formal structure in the future, though the present aim is to create a structured environment to encourage deal flow at a national level, undertake due diligence and tap into the domain expertise of the participating families. The idea to form a consortium of family offices comes at a time when a growing number of family offices are looking at direct investments.
Embassy Buildcon pledges WeWork shares to raise ₹200 crore
Embassy Buildcon LLP, the holding company of WeWork India, is pledging its shares in the co-working firm for a ₹200 crore financing facility from ICICI Bank Ltd, Mint reported citing a filing with the Registrar of Companies (RoC). As per the pledge agreement, Embassy Buildcon has agreed to pledge its shares in WeWork India Management Pvt. Ltd, representing 26% of the paid-up equity share capital of the latter, in favour of ICICI Bank. The We Co., the American firm which operates co-working office spaces under the WeWork brand, posted robust revenue growth in India, even as it reels under massive losses globally, as per the company’s first public regulatory filing, Mint reported on 15 August. Since its entry in India in 2016 through a partnership with Bengaluru-based real estate firm Embassy Group, WeWork has been aggressively expanding its footprint. At present, it has 23 co-working centres—nine each in Bengaluru and Mumbai, and another five in Gurugram—adding up to 39,000 seats. According to a report by Reuters, The We Co. is looking to raise $3-4 billion through an initial public offering (IPO), which is likely to be launched in September this year. New York-based We Co. posted net loss of around $689.7 million and revenue of $1.54 billion in the first six months of 2019.