2016 was a terrible year for media globally. And 2017 might be even worse. Things haven’t been looking up in India. It’s only February and the Kolkata-headquartered ABP group is reported to have laid off anywhere between 300 to 700 employees.
But far away from Kolkata, in Bengaluru, there are silver linings.
Because YourStory Media Private Limited has raised a fairly respectable amount of funding from an even more respectable person – Ratan Naval Tata, former chairman of the Tata Group and the chairman emeritus of Tata Sons. But isn’t Tata already acknowledged to be one of India’s most prolific angel investors?
What is significant is that this investment marks Ratan Tata’s debut as a venture capitalist. This investment in YourStory is the first publicly disclosed investment of Tata through UC-RNT fund, a $150 million venture capital fund helmed by Tata and funded by the University of California (UC). The UC-RNT fund received approval from Securities and Exchange Board of India (SEBI) late last year as an alternate investment fund.
According to documents filed with the registrar of companies (RoC), Ministry of Corporate Affairs (MCA), YourStory has raised about Rs 20 crore in funding — Rs 9 crore each from UC-RNT fund and Kalaari Capital partners. Rs 1 crore each from Vistra ITCL Limited and Qualcomm Asia Pte Ltd.
It’s interesting and curious that a $150 million fund’s first investment in India is into the media business. We’ll get around to that in a while, but first, a few hygiene points:
- This is a Series B round for YourStory.
- On a fully-diluted basis, this translates to a post-money valuation of Rs 152 crores (around $23m) and gives UC-RNT approximately 6% holding in the company post the funding round.
- YourStory had raised around $2.5 million at $7.5 million pre in the last round. So this is a significant jump up in valuation.
- In 2015, Tata invested in YourStory in his personal capacity.
- Tata is an advisor to Kalaari Capital partners, the other large investor in YourStory.
- As of March 2016, YourStory recorded a turnover of Rs 8.7 crore and a loss of Rs 5.9 crore.
News around UC-RNT fund has been building up for months now. That the fund has been scouting the market looking for promising investments. Several people have been associated with the fund, mostly from RNT Associates, the privately held investment firm of Ratan Tata. The team includes Mathias Imbach (who was earlier with Bain & Co), Ramachandran Venkataramanan (former executive assistant of Tata and the key man at RNT Associates) and Mayank Singhal, venture investor at RNT Capital Advisors, who in his previous assignment was an associate director at Temasek Holdings Pte, the Singapore investment firm.