When Carlyle, the private equity fund with $221.5 billion of assets under management, along with Tiger Global wrote a $100 million cheque for Delhivery in 2017, it stunned many in the startup ecosystem. Carlyle, one of the largest private equity funds globally, is known for its razor-sharp focus on profitability. Yet here it was backing Delhivery, a logistics tech company with losses of Rs 631 crore ($88.2 million) in the year ended March 2017. And while its losses grew to Rs 684 crore ($95.6 million) in the following fiscal, Carlyle topped up its investment by participating in a $395 million round in March this year.
PEs are recoding the internet business double helix
As private equity funding floods India’s tech startup ecosystem, it’s transforming everything from company to VC behaviour
Large private equity funds who previously shunned high cash burn businesses are increasingly drawn to consumer tech companies
With many of them queuing up to invest at a Series C stage or later, valuations have gone up
While VCs are happy for exits, large PE cheques could also mean companies remaining private longer
More PE money could also mean that the era of crazy startup growth at the cost of fiscal discipline may be over