Alternative Investments

Info Edge, Early Backer Of Zomato To Policybazaar, On Startup Valuations, Business Recovery And More

As the markets debate the valuations of internet companies that have yet to report profit, Info Edge India Ltd., an early backer of startups including Zomato Ltd. and Policybazaar, says the traditional valuation methods do not work.

“Large players like Sequoia (Capital) have seen merit in investing early and being with entrepreneurs throughout the journey. In a tech business, you are valuing an IP (intellectual property), not cash, at the early stage,” Chintan Thakkar, chief financial officer at Info Edge, told BloombergQuint’s Niraj Shah in an interview. “Valuing IP means you are foreseeing the potential 10-15 years down the line.”

The business then sees growth in cash generation as well as the top line, he said. “It is this growth potential that people are ascribing value to. It is subjective and, hence, is witnessing varied valuation trends.”

Among Info Edge’s portfolio firms, Zomato and Policybazaar’s parent PB Fintech Ltd. have already made market debut with gains. Some others are also nearing the IPO stage, drawn by India’s record year for maiden offers that saw investor demand for digital businesses. Yet, the listing debacle of One97 Communications Ltd., Paytm’s parent, has raised concerns about valuations again.

Info Edge has 25 active investments, either directly or through its alternative investment fund, according to Thakkar. These are early-stage bets made in 2016-17 but showing promising results in terms of demand during the subsequent rounds of funding, he said.

For the company, business picked up in the quarter ended September with a surge in usage of portals including Naukri.com and 99acres.com, Thakkar said. He is hopeful of a pickup for matchmaking portal jeevansathi.com.


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