How Sequoia Capital Lost The Times Internet Deal

Sequoia Capital’s deal with Times Internet Ltd (TIL) did not work out. But its co-investor WestBridge Capital could pick up 2.9 per cent stake for $7 Million. The truth is TIL changed its plans to raise funds now, as it thought it could get better valuations at a later stage. The valuation of internet companies was going through the roof, just when Sequoia and WestBridge were courting TIL for investment (the Indian portal had plans to raise some $30-36 million). Rediff‘s valuation in Nasdaq is about $450 million. And Rediff is only just half as big as TIL, which owns properties like Indiatimes.com and 8888 (mobile short code service). TIL has revenues of more than Rs 100 crore while Rediff’s is half of it. So TIL decided to wait rather than diluting its stake in a big quantity now.
An addendum to this is that TIL did not need the money, says a source. The idea was to coopt venture capital firms just to lead them to an IPO next year.
So how did WestBridge get in? Because the Bangalore-based fund had excellent relations with Vineet Jain, who is the MD of TIL, and the VC fund was brought in to help the internet company strengthen its management bandwidth, hire senior people, improve governance norms etc. WestBridge’s Senior Managing Director Sumir Chadha (based in Silicon Valley) has joined the TIL board. WestBridge has been able to get in at the old valuation – around $200-$240 million. That’s a great deal for WestBridge.
Related:
IndiaTimes Sells 15 Percent Stake To Sequoia & WestBridge For $36 Million

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