Founders of InMobi and Zetwerk are separately raising debt in their personal capacity to increase their stakes in their respective companies, multiple people with knowledge of the development said.
InMobi founders led by Naveen Tewari are raising debt potentially to partially buy out early investors, the people cited above said on the condition of anonymity. This will also hike the founder group’s stake in the company.
Multiple investment banks are arranging the trade for InMobi, the people cited above said.
InMobi did not respond to a request for a comment. In an interview with the Mint last September, Tewari had said that the company intends to list both InMobi and Glance. InMobi is also in the process of flipping back to India.
Also read | InMobi’s consumer bet is working; Glance profitability in sight, IPO may be next
SoftBank Group, a key shareholder at InMobi, has remained invested in the company since 2010. Other investors include Ram Shriram-backed Sherpalo Ventures and Kleiner Perkins. InMobi founders, also including Amit Gupta, Mohit Saxena and Abhay Singhal, own a majority stake in the company.
At Zetwerk, co-founders Amrit Acharya and Srinath Ramakkrushnan are raising upwards of $100 million to increase their stake in the company, two separate people with knowledge of this transaction said, also speaking on the condition of anonymity. The co-founder group, also including Vishal Chaudhury and Rahul Sharma, collectively owns around 15-16% in Zetwerk.
Some early Zetwerk investors could exit in this deal, but some of the capital is also expected to go into the company, one of the people cited above said.
Zetwerk did not respond to a request for comment.
Zetwerk investors include Avenir Growth Capital, Steadview Capital, and Khosla Ventures. It was last valued at around $3 billion.
Read this | Why InMobi is banking on ‘app-less’ consumption, AI-driven user platforms
The company is targeting a listing within the next 15 to 24 months and has appointed several banks, including Axis Capital, Goldman Sachs, and Kotak Mahindra Bank, for the potential initial public offering (IPO), according a January Economic Times report.
Earlier this week, Economic Times and Bloomberg reported that Zepto co-founders were also raising debt amounting to ₹1,500 crore to increase their stake in the quick commerce startup. The report stated that Edelweiss Alternative Asset Advisors was in talks to infuse capital into the business.
Some of the cap table realignment is happening because IPO timelines have become vague due to market volatility. An IPO would have given early investors a cleaner exit and allowed the companies to raise capital.
And read | Zepto eyes $250 mn from HNIs, wealth firms at flat valuation
Founders have an inside view of how things are going within the company, said Kashyap Chanchani, co-founder and managing partner at investment bank Rainmaker Group. “The cost of capital of debt is 12-14%, return on equity is 25-30%,” Chanchani said, referring to the increasing trend among startup founders hiking stakes in their companies by raising debt. Founders might as well invest further in their own company, as it is an asset class they understand best, Chanchani said.
