ESV Times | Monthly Newsletter | March 2025

ESV Year-end Update 2024: “Continued Success. New Learnings & Capabilities”

We finally got around to completing our annual update on all the developments in our ‘ecosystem’. It’s a pretty comprehensive note covering all aspects of our work, including updates on our portfolio. We’ve always prided ourselves on perhaps being the most transparent venture investment team – willing to openly talk about our failures and learnings as much as about our success stories. Our updates continue to imbibe and propagate these principles.

Quick highlights:

• Made 3 new investments only: one in a sports-tech venture, a second one in a pre-IPO round of our B2B school-tech company, third in a social-impact ed-tech venture
• Made multiple partial-exits – with 40%+ IRR in all;
• Developed new capabilities in SME IPO and M&A

Special mention upfront for the sports-tech venture where we invested in Nov; already doing ~30 Cr.+ ARR managing 30 sports centers in Bangalore. This was also the first deal in which we were able to get the legendary cricketer Zaheer Khan to join our investment round. Some specific updates on our Portfolio, focused more on revenue growth / P&L than just valuations:

• Logistics-tech venture grew from ~₹28 Cr. ARR to ~₹40 Cr. ARR with a target to double revenues in the next 12 months. The company consolidated its last-mile distribution optimization modules with mid-mile / long-haul to create a completely integrated Transportation Management System (TMS) – the only one in India with extensive predictive analytics capabilities for planning (optimization modules) in addition to standard digitization modules offered by others. It further rolled out India’s most advanced Warehouse Management System (WMS) – first in the country to integrate both to offer exceptional end-to-end capabilities. We also kicked-off prep for a $3M raise (though the company is cash-positive – so it’s largely buffer money)

• B2B school focused ed-tech venture grew 2x in rev to ₹60 Cr. ARR without any capital infusion, with positive PAT. We decided to put this venture on track for a public listing, and infused an additional 6 Cr. to target 100 Cr. sales / 10 Cr. PAT to start the SME IPO process. We also got a public market expert to invest in personal capacity.

• India’s popular healthy FMCG brand (including keto products) grew 100%+, reaching an ARR of ₹50 Cr driven by new products and category leadership in Q-commerce. It also got an overwhelming response to its pre-Series A fund-raise, raising ₹20 Cr. against the initial plan of ₹10 Cr. The venture continues to add new products, enhance production capacity and expand their cloud kitchen.

• Next-gen executive education venture achieved a consistent growth reaching an ARR of ~₹50 Cr. at positive EBITDA without any capital-raise. Additionally, the venture started multiple programs with Oxford and CMU, and launched new programs in Saudi Arabia and UK. The company has also expanded its leadership team by bring onboard CTO & CBO. The company is getting ready to do launch an IPO in the next 12 months, with a pre-IPO round planned shortly.

• India’s largest OTT platform for local dialects achieved a 40% revenue growth, with current ARR of ₹180Cr – a 7x+ growth from last year. One of the largest success stories in India.

• Our last B2B2C investment in a fashion-tech venture did very well, increasing their ARR by ~50% to ₹15 Cr. The company is expected to get three top-tier celebrities to be investing at a valuation that’s 2.5x of our valuation last year.

Capabilities we’ve added during the year:

This year we’ve focused significantly on building core capabilities that will solidify our exit strategies for various portfolio companies; while we continue to work with external partners on this front, we believe having these capabilities within control will ensure expected outcomes:

• IPOs (SME and/or main board) : Public markets in India have been performing exceptionally well, and SME IPOs have suddenly scaled faster than any of us expected; though there’s a lot of froth in the system, we do believe IPOs will now be a great exit option for many startups, specially for us – since we only invest in companies that are operationally profitable, and are closer to meeting IPO norms. To this end, we started working extensively with merchant bankers and anchor investors to start paving the way for IPOs..

• Mergers & Acquisitions : We’ve always been very good at M&A given the background of all the Partners. We’ve now put a dedicated team for running M&A deals, and initiated 3 mandates on this front

We also welcome two Consulting Partners onboard : Aditya Jadhav (CFA, Mumbai) and Ganesh Balakrishna (IITB, IIMB, Bangalore) – both with significant experience as investors, bankers, consultants and entrepreneurs.

With 4+ years of continuous validation of our investment thesis, we intend to double-down on our low-risk startup investment thesis:

• Invest in post-seed / post-PMF and pre-Series A, where we find the best risk-reward situation for ourselves
• Explore M&A to structure roll-ups for our portfolio companies by acquiring smaller companies, or as an exit for us
• Setup companies for IPOs wherever viable

Here is the complete update note. Looking forward to exciting times ahead in 2025.

Regards

Abhishek Sanghvi

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