Sequoia Capital, the Silicon Valley-based VC heavyweight, has pulled out of its investment in IndiaTimes, the biggest portal in India. Initially, the deal, closed in July earlier this year involved selling a 15 percent stake to WestBridge Capital Partners, a Bangalore-based venture fund, and Sequoia Capital, the Silicon Valley-based VC heavyweight, for $36 million.
The story above says that the deal did not materialize beyond talks and now only WestBridge has taken a 2.9 percent stake. It says that IndiaTimes, which was on track to be listed on Nasdaq, saw its plans being dashed because of some guidelines by the Indian regulatory authority which said companies listing abroad will have list first in the domestic market. Sequoia didn’t want to be involved in that complicated process, it seems.
Meanwhile, our reporter in Delhi, S Karat, has some insider news on the wheeling-dealing involved in the deal: “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. ”
Related:
– Indian Portal Indiatimes Mulling IPO
– IndiaTimes Sells 15 Percent Stake To Sequoia & WestBridge For $36 Million
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