Earlier this week, Bala Srinivasa and Prashanth Aluru exited Kalaari Capital, a prominent Bengaluru-based venture capital firm. Srinivasa and Aluru were “junior partners” at the firm.
Some industry observers opined that these exits are linked to the challenges that Kalaari is facing while attempting to raise its new fund, its fourth fund in a timespan of nine years. They averred that Kalaari “will find it difficult to raise its next fund amid all the organisational changes”, and that “Kalaari, like most VC funds in India, has found it acutely challenging to clock any significant exits to show to its limited partners”.
Vani Kola, Managing Director of Kalaari Capital, brushed off these exits as “not being material” as these two gentlemen were not “key-men” in the firm. A ‘key-man clause’ is a contractual term in a VC firm that says that when certain executives of an investment firm are absent, the firm cannot make any new investments until they replace them.
Let us examine these statements in turn.
How has Kalaari fared with exits?
According to data provided by Tracxn, eight companies funded by Kalaari have seen exits.
|Acquired By||Acquired Date|
|Myntra||165.44||flipkart.com||22 May- 2014|
|Grabhouse||13||quikr.com||21 Nov- 2016|
|DoorMint||3||wassupondemand.com||21 Apr- 2017|
|Smart Campus||2.25||campusmanagement.com||06 Apr- 2015|
|mGinger||2||vfirst.com||27 Jun- 2012|
|Volta Motors||0.1||smartron.com||02 Feb- 2017|
List of Kalaari Capital exits (Source: Tracxn)
While most of these are non-material, the acquisition of Myntra by Flipkart is a significant win. Of course, the more famous exit is that of Snapdeal—Kalaari was an early backer of this once ecom-bellwether and partially sold its holding to SoftBank in a secondary sale. Kalaari is said to have made $100 million (a multiple of 4X on its investment) in this sale. While the VC firm still holds approximately 8% in Snapdeal, given the company’s abandoned merger with Flipkart, it is unlikely to see any further gains from it in the short term.
On the back of Myntra and Snapdeal, it would be fair to characterise Kalaari’s exit scorecard as being “good, but not great”.