The Blume Ventures mavericks are at it again, I am sure everyone did their weekend reading, setting high return benchmarks is one thing, but their transparency and insight sharing score is off the charts, and this can only be driven top down - Karthik B. Reddy, congratulations to the team for putting together such a detailed, honest report!
Shout-out to batchmate Tonmoy Shingal (Building Binocs) and Mettl featuring amongst their exited winners!
If you somehow missed it, highly recommend reading it here - https://lnkd.in/gwD7hbm2
1) Generated a solid ~21% INR IRR (assuming this is gross?) and a ~5x MoIC in their two funds. Net IRRs post carry would be handle 18% pre-tax, outperforming most asset classes including gold!
2) Moved winners to their continuity fund, alternative would have been to sell secondaries at steep discounts. Fund lifecycles and startup growth cycles are just not matched to optimise value capturing, expect to see more of this from VCs
3) Report rightly states that roll-ups to acquire innovation are hard to execute. We think if done right with a proper strategy, and founder alignment it can be a pivotal growth strategy for startups of any scale. Personally, think Ultrahuman is a great case study (also a Blume port co), their star product - the ring which is now pushing boundaries worldwide was an acquisition, the founder heads their hardware division 3 years later. The original product focused on the "lazy" use case to take calls and change slides, with further R&D and positioning, it is now the foundation of a "active" health monitoring revolution
4) 1/3rd of their portfolio companies exited through M&A, early exits saw a 3x MoIC, these would have been earlier in the journey so IRRs could be healthy. ~40% of the M&A exits created MoICs of 1x+. We can and will create a more perfect market to capture the value created by startup founders, Blume says a large set of startups had headroom for growth but no one to take it forward, work to be done here...
Watch out for an exciting launch for VCs and startups at Done Deal, we can't wait to have you onboard!
#indianvcs #exitsandliquidity #benchmarkingreturns
