Peak XV Partners is the new Indian entity of the erstwhile Sequoia Capital India and South East Asia formed in the first week of June after its parent entity, the US-based Sequoia Capital split into three separate firms. The split will enable the Silicon Valley-based VC firm to focus on its key markets – Europe and the US, China, India, and Southeast Asia. Sequoia Capital India and South East Asia had an impressive track record across the Indian subcontinent by raising $9.2 billion across 13 funds and earning $4.5 billion in exits through mergers and acquisitions and IPOs. Over and above, the VC firm invested in more than 400 companies.
Peak XV Partners sets the market abuzz
Soon after its formation, Peak XV Partners continued with the legacy inherited from Sequoia Capital India and South East Asia and made a dramatic exit from Go Fashion, the parent company of the popular women’s ear brand Go Colors. Timely exits have helped Sequoia Capital make significant gains earlier and now it was the turn of the new entity to make its presence felt by going for a sensational exit. On June 12, the VC firm exited Go Fashion by selling its entire stake of 10.18%. The worth of the block sale deal amounted to Rs.624 crores equivalent to $150 million. The rate of return is massive if you consider that the firm had invested about $10 million in 2014 in the women’s wear brand, thereby enjoying a return of 15-16 times.
About Go Fashion
The founders Prakash, Rahul, and Gautam Saraogi formed the company Go Fashion in Chennai. The company is engaged in the design, development, sourcing, and marketing of a range of bottom-wear products for women under the brand Go Colors. The company has been experiencing massive growth with its revenue rising by 66% between 2022 and 2023 from Rs. 401 crore to Rs.665 crore. During the same period, the company’s profits surged by an incredible 133% as it grew from Rs.35.6 crore in 2022(FY) to Rs. 82.8 crore in 2023(FY).
Exits provide hefty returns
Venture Capital firms make the most money from exits and it’s no different for Sequoia. Over the past few years, the company made partial exits from Pine Labs and Zomato while fully exiting Vini Cosmetics to maximize the returns. In the case of Chennai-based Go Fashion whose revenue grew from Rs.401 crores in 2022(FY) to Rs.665 crores in 2023(FY), the first time Sequoia exited was during the IPO (Initial Public Offering) event in November 2021 when sold 50% of the shares amounting to Rs.517 crores.
Soon after completion of the one-year lock-in period from the date of listing, the VC firm went for another round of selling shares while collecting Rs. 228 crores. Adding to it the amount of Rs.625 crore collected from the final exit, the total return on investment amounts to Rs.1,370 crore which is nearly 22.8 times the initial investment of $10 million or Rs.60 crore.
During the final exit, Peak XV Partners enjoyed a 43% internal rate of return on the original deal.