Sachin Bansal’s latest startup investment; this is what makes him do venture debt deals

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Published: July 17, 2019 2:37:23 PM

Post exit from Flipkart Sachin Bansal has backed scooter rental startups Bounce and Vogo, NBFC startups IndoStar and Altico in venture debt deals while it made equity investment worth $32 million in electric scooter startup Ather Energy in May this year.

Sachin Bansal has backed electric scooter startup Ather Energy in May this year.

Flipkart co-founder Sachin Bansal, after making multiple investments in venture debt post his exit from Flipkart after acquisition by Walmart, has now backed consumer electronic startup boAt with Rs 20 crore venture debt through his second venture BAC Acquisitions. Launched in 2016, boAt will deploy the capital towards business operations, the company said in a statement. boAt had last year raised Rs 6 crore from Fireside Ventures in their first funding round. The company claimed to have made gross sales worth Rs 100 crores in FY18 and is looking at Rs 500 crore target in ‘the next couple of years’.

“Venture debt provides Sachin Bansal for more of a promoter-to-promoter kind of a discussion wherein valuation really doesn’t matter unlike if he invests as an equity investor it would bring in talks about valuation as well and also founders would have to take consent of company’s other investors. All these hassles are not required in venture debt investment,” a venture capital investor told Financial Express Online. “Apart from a more personalised one-on-one interaction with promoters, there is no stake dilution for the latter during the time of the investment. So it works for Sachin and the founder and other investors too even as backing from Sachin brings great credibility to the startup,” another investor said.

Post exit from Flipkart Sachin Bansal has backed scooter rental startups Bounce and Vogo, NBFC startups IndoStar and Altico in venture debt deals while it made equity investment worth $32 million in electric scooter startup Ather Energy in May this year. Sachin Bansal has also reportedly invested Rs 200 crore in debt paper issued by Piramal Enterprises.

“Venture debt is an important part of the growing entrepreneurial and venture capital ecosystem. It helps meet specific requirements for startups in terms of capex heavy or cash flow blocking activities where equity money may not be the best source of capital,” Manish Kheterpal, Managing Partner, WaterBridge Ventures told Financial Express Online.

boAt claims of having 12 lakh customers and adding a new customer every three minutes. It sells “more than 8,000 units per day and on an average 5 units every minute.” the company said. Raising venture Debt “helps us keep the capital structure intact,” said Aman, Gupta, co-founder, boAt adding that its lean business model along with targeted business insights has helped the company with ‘logical’ margins. The company denied giving further details around the fundraising and the business. Comments from Sachin Bansal are awaited.

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