Foundation PE buys Limited Partner stake in Prime Venture Partners' Fund 1

With this, Prime VP has delivered a healthy, top-decile return to its Limited Partners in 9th year of operation and has further extended the fund by four years

Foundation Private Equity (FPE), a provider of bespoke secondary solutions across Asia and Prime Venture Partners (Prime VP), an early-stage India-focused VC fund, said that FPE has acquired all of the LP (limited partner) interests in Prime VP’s Fund 1 via a LP tender offer process. Prime VP’s Fund 1 is a Mauritius-based fund and the first investor in seven companies including edtech startup Quizizz, and fintech startup Happay (recently acquired by CRED). With this development, Prime VP has delivered a healthy, top-decile return to its Limited Partners in its 9th year of operation and has further extended the fund by four years. Singapore based Candor Asia Advisors Pte Ltd., a specialist in complex secondaries and GP-led deals, was the sole advisor to this transaction. The deal size was not disclosed.

Foundation Private Equity, started by industry veterans Jason Sambanju and Jeremy Foo, was formed in 2017 with a mission to provide innovative solutions to Limited Partners and General Partners at all points of their fund life cycle. With a flexible approach, FPE’s solutions are often highly customised in order to ensure full alignment with all stakeholders.

“The FPE team has taken a patient approach thus far with evaluating venture opportunities in India, and we are excited to be backing a very high-quality GP (general partner) team and portfolio with our first transaction in India,” said  Jeremy Foo, co-founder and partner, Foundation Private Equity. “We have strong conviction in the value that Prime VP brings to their investee companies, and are excited about the journey ahead.”

Prime Venture Partners is an India-focussed early stage firm started in 2012 with an Indian advisory office led by Shripati Acharya, Sanjay Swamy, Bala Parthasarathy and Amit Somani. With a view of bringing Silicon Valley style professionalism to venture investing, Prime VP’s mission is to partner early with entrepreneurs and help build world-class technology companies that are addressing some of India’s most important problems. Currently in its Fund IV of $100 million, Prime VP is typically the first institutional investor and focuses on companies with an innovative approach to solving fundamental problems through technology. Prime VP has raised four funds since its inception and manages more than $ 250 million with investors including the International Finance Corporation (IFC), part of the World Bank Group and a top-tier university endowment, several family offices and institutions, and numerous global technology entrepreneurs.

“We were extremely happy with FPE’s approach to understanding the nuances and motivations of early-stage entrepreneurs,” said Sanjay Swamy, co-founder and managing partner, Priven Advisors, Advisory to Prime Venture Partners. “We’re also very appreciative of the work done by Soma Ghosal Dhar at CandorAsia in helping orchestrate a smooth process for all parties involved.”

Soma Ghosal Dhar, managing director Candor Asia Advisors Pte. Ltd, said such secondary restructurings offer a powerful second wind to high-quality portfolios managed by pedigreed GPs, while also providing much-needed liquidity at attractive return multiples to patient LPs.

With this fund extension, FPE now becomes the sole LP in Prime VP’s first fund that was originally raised in 2012. The companies under this fund include Quizziz, an interactive learning startup, Happay (acquired by CRED), a business expense, payments and travel management platform and Waggle, a US-based pet tech company. The other such firms include HackerEarth, a solutions provider to source, assess, upskill and engage software developer talent and Synup, a digital profile management and customer experience optimization solution for businesses. The other two firms include Vidgyor, an Adtech platform and Smartowner, a property investment management marketplace company.

The internet and digitisation boom in India has triggered a corresponding boom in the Indian startup ecosystem resulting in a huge influx of capital to early-stage companies. In 2021, Private Equity-Venture Capital (PE-VC) firms invested a record $63 billion across 1,202 deals in Indian startups. While the Indian startup ecosystem has recently started witnessing a spate of technology IPOs and mergers and acquisitions, fund-level secondary transactions and extensions have been few and far between, largely because such solutions require alignment of three stakeholders - Portfolio Companies, Fund Managers (VCs) and Limited Partners.