Former MD of Peak XV Piyush Gupta Establishes Kenro Capital and Considers Secondary Transactions

Nitin Konde, Varun Bhardwaj

Nov 30, 2024 — 3 min read

Piyush Gupta, Ex-Peak XV MD, Launches Kenro Capital

As early investors in startups increasingly seek exit opportunities, Piyush Gupta, the former managing director of venture capital firm Peak XV, established Kenro Capital on 28 November to focus on late-stage secondary deals. Gupta told a media house that the fund will look for acquisitions in the consumer and financial services sectors, with an emphasis on tech-led businesses. According to him, the company intends to invest $20–30 million per transaction, with the possibility of deploying bigger sums through co-investment opportunities. This occurs months after Gupta saw a need in the secondary fund industry and left Peak XV to start his own fund.

"Think of all the corporate venture investors, founders, workers, and hundreds of venture firms that invest in startups. Who do they turn to when they need to come up with an escape plan? No one is there. And we are concentrating on that chance," he stated. Additionally, Gupta stated that Kenro is in talks to raise money, but he withheld further information.

Requirement of Secondary Fund is Essential

Due to the mature VC environment in India, where some funds are now 17–18 years old, Gupta thinks that a secondary-only fund is crucial. This creates demand for exits. He went on to say that secondary funds now have more dependable and transparent liquidity opportunities as a result of the liberalisation of the Indian IPO market. "The IPO exit flywheel is operating slowly, and capital markets have deepened significantly," he continued.

Kenro Capital will pursue minority holdings in growth companies that have reached revenue scale, are profitable, or are close to profitability within the priority industries. Additionally, the business will favour companies that have the potential to go public two to three years following its investment.

Secondary transactions let additional investors place bets on late-stage businesses while enabling current investors to cash out all or part of their investment in a startup. More than a dozen firms, including Capillary Technologies, ixigo, Urban Company, Porter, and Pocket FM, underwent secondary transactions in the first half of this year. Similar agreements are currently being made at firms like Lenskart, Acko, and OfBusiness. It is important to remember that Gupta is not the first person to profit from this year's trend of secondary acquisitions.

A new fund with a target corpus of INR 150 Cr (about $18 Mn) and a major concentration on secondary market transactions was unveiled by LC Nueva Investment Partners in October. 360 ONE Asset, an asset management firm, introduced the INR 4,000 Cr Special Opportunities Fund-12 earlier in May with the goal of investing in late-stage entrepreneurs. According to the company, it is the first alternative investment fund (AIF) in India that is specifically focused on the secondary market for private equity.

Kenro Capital to Focus on Growth Secondaries in India and Southeast Asia's Venture Ecosystem

The venture ecosystems in India and Southeast Asia will be the primary focus of Kenro Capital's investments. Norbert Fernandes, a private equity expert with experience at Temasek, IvyCap Ventures, and TR Capital, joins Gupta. Gupta will remain stationed in Singapore, while Fernandes will be located in Mumbai. The fund intends to expand its staff to "five to six investment professionals."