IvyCap Ventures, among the earliest early-stage venture capital (VC) firms in the country, has delivered a whopping 22x return to its investors through a partial exit from online beauty store Purplle. IvyCap sold its fund 1 stake of 30 per cent, purchased with a $2 million investment in 2015, at an exit value of $45 million, making it among the biggest returns ever delivered for a rupee investor in the startup ecosystem. “We have retained our stake from fund 2. In fact, we would not have exited fund 1 but we wanted to give returns to our investors. Rupee investors in venture capital have not seen returns like this before,” Vikram Gupta, Founder and Managing Partner, IvyCap Ventures told Financial Express Online.
IvyCap had raised its first fund of Rs 240 crore in 2013 and invested around $2.8 million from its second fund of $550 million raised in 2017. “The exit is a big boost to the domestic VC ecosystem and will give a lot of confidence to invest in this asset class. It is a defining moment for the industry. The whole idea is to clear the way for the future fundraise and to give confidence to investors,” added Gupta. The exit has enabled IvyCap to generate 1.35X of its entire fund 1 value of Rs 240 crore.
“IvyCap Ventures has been instrumental in fuelling Purplle’s expansion, being our Series A investor. Even with a Covid year, we have delivered more than 90 per cent GMV CAGR for the last three years,” said Manish Taneja, Co-founder and CEO, Purplle.com. The partial exit by Purplle to IvyCap has come along with the investment of $45 million from Sequoia Capital India, and existing investors Verlinvest, Blume Ventures, and JSW Ventures.
Purplle was launched in 2012 and currently has over 6 million users and 3 million monthly active visitors. It claims to have over 700 brands with nearly 50,000 products available on its website and app. The company had raised $30 million in Series C funding at end of 2019 from Goldman Sachs and Verlinvest. It currently competes with unicorn startup Nykaa, Sugar Cosmetics, MyGlamm, and horizontal marketplaces such as Amazon, Flipkart, and fashion marketplace Myntra. “The market for online beauty and personal care is huge and multiple players can survive simultaneously. The combination works very effectively between vertical and horizontal players,” said Gupta. IvyCap manages Rs 1,500 crore across three funds.
The beauty and personal care market is likely to have $26.85 billion in revenue in 2021 and grow at a CAGR of 8.51 per cent till 2025, according to Statista. The largest segment in the market is personal care with a market volume of $12.26 billion in 2021. Globally, the US is the biggest market with $82.26 billion in 2021.