ESV Times | Monthly Newsletter | January 2025

Reflections and Roadmap: ESV’s Journey in 2024 and Vision for 2025

We extend our warmest wishes for a prosperous 2025. The past year has been an extraordinary journey for early-stage investing, and we’re grateful for your continued trust and collaboration.

The Indian startup ecosystem showcased its resilience, with total VC funding reaching $25 billion in 2024. A particularly remarkable highlight was the surge in SME IPOs: 243 companies launched SME IPOs in India (35% more than 2023), raising ₹8700 Cr. Even more surprising was that 126 IPOs were subscribed over 100 times. This demonstrates a massive retail appetite to invest in the Indian equity story.

The retail interest in smaller companies, emerging technologies and startups has definitely helped thaw the proverbial funding-winter of 2023 for startups. A far higher number of VC-backed startups are now considering IPOs as a way to exit instead of waiting for the next Series of private funding. In fact, often the public market valuations are higher than private market valuations – something that would have been unthinkable just a couple of years ago.

As markets evolve, we have also been fine-tuning our investment strategy to make sure we are able to deliver better investment outcomes for our investors (lower risk, higher IRR, shorter turnaround).

In 2024, Ecosystem Ventures invested in three dynamic startups:

We kicked off the year with a strategic investment in Exampur, an ed-tech startup specializing in government test preparation. Leveraging both technology and YouTube, Exampur impacts over 10L+ students annually. The platform provides 145+ hours of classes for just ₹399, creating a meaningful difference for aspirants in tier 3 and 4 cities.

We followed that with an investment in Machaxi, bringing India’s favorite fast-bowler Zaheer Khan to co-invest with us. Machaxi is – redefining sports engagement through a unique leasing model by acquiring existing private sports centers. These centers are rebranded, upgraded, and optimized with best-in-class infrastructure and technology, creating thriving hubs for sports enthusiasts. Through a mix of school partnerships, community outreach programs, and localized sports center dominance, they attract and retain young athletes. Machaxi trains over 2,000 kids monthly across its 25 centers primarily in Bangalore, and will soon be expanding to Hyderabad and Pune. Sports in India is poised for exponential growth in years to come, and Machaxi is right at the forefront of this revolution.

We concluded the year by making our first pre-IPO investment in another school-tech innovator doing ₹60 Cr. in ARR. We’re now helping the venture grow to ₹100 Cr. topline with 10-15% PAT, at which point an SME IPO should be in the works.

Beyond our fund-investments, we continued to build extended capabilities within our larger ‘ecosystem’. We now have Partners building new capabilities in M&A for IT products & services, D2C brands and ed-tech. We’re also building deep expertise in SME IPOs to help our portfolio companies & investors unlock their equity value through public markets.

Here’s to another year of bold ideas, transformative growth, and collective success. We look forward to achieving new milestones together in 2025.

Regards

Abhishek Sanghvi