Peak XV Partners secures 16x return in nearly 9 yrs on investment in Go Fashion: Report

VC firm Peak XV Partners, previously known as Sequoia Capital India and Southeast Asia, achieved an impressive 16x return on its total investment in Go Fashion, the parent company of Go Colors, a popular women's wear brand, said a report on Monday.

The venture capital firm sold its entire 10.18% stake in Go Fashion through a block deal on Monday.

Moneycontrol reported that Peak XV Partners made an investment of approximately $10 million in the women's leg-wear manufacturer back in November 2014 and ended up earning a whopping $150 million. This translates to a multiple of 15 to 16 times the original investment, with an impressive internal rate of return (IRR) of 43%.

The entire investment amount would be utilised by the Peak XV team, which is now separated from Sequoia Capital in the United States.

Shailendra Singh, Managing Director of the Peak XV Partners had said that the profit-sharing agreement between the VC firms will be dissolved.

“We had something called One Sequoia, which is a global fee and carry sharing pool, which will be dissolved. There are some nuances but you can say the profit-sharing agreement will get dissolved,” Singh said during an interview with Moneycontrol.

Peak XV Partners, which previously held a 13.8% stake in Go Fashion, initiated a block deal in December 2022. It had, however, launched a block deal in December 2022 to sell a 3.7% stake for Rs 228 crore.

However, recent reports indicated that the venture capital firm is now in discussions to sell its remaining 10.18% stake in Go Fashion, representing a complete exit.

The stake sale is expected to have a floor price of approximately Rs 1,135 per share, offering a discount of about 5% compared to the Friday closing price.

The total value of the block deal is estimated to be Rs 625 crore.

As per the shareholding pattern shared with the BSE, Sequoia Capital held nearly 55 lakh shares accounting for 10.18% stake in Go Fashion as of March 31, 2023.

Go Fashion witnessed a 20% rise in net profit to Rs 15 crore for the quarter ended March 2023, as against Rs 12 crore in the year-ago period.

The company’s total income for the quarter rose by 34% to Rs 160 crore, as against Rs 119 crore reported in the corresponding period of the previous fiscal year.

Go Fashion's scrip on BSE ended the Monday trading season nearly 5% lower at Rs 1,136.10 apiece.

A few days ago, Sequoia Capital said it is splitting its businesses in China as well as India and Southeast Asia into two independent firms, which will be run without any involvement of Sequoia going forward.

The China firm will be named Hongshan in English, while in India and Southeast Asia, Peak XV will manage more than 400 portfolio companies and assets of $9.2 billion, which Sequoia previously managed.

Sequoia also raised $2.8 billion last year to invest in Indian and Southeast Asian startups, but the majority $2.5 billion remaining will be invested by Peak XV, which is now India's biggest venture capital firm being run by Sequoia's former managing directors in the region.

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