Ola investor Matrix eyes $75m cash gain in secondary sale, $400m new fund

Matrix Partners India is one of the country's largest venture capital firms, but its gains from startups have paled compared to peers. Now Matrix is looking to fix that by selling a stake in Ola, even as its other lucrative bets lead to a record $400 million new fund.

Matrix Partners India, an early investor in ride hailing unicorn Ola, is planning to sell a portion of its stake in the company to existing investors for about $75 million, a key move to return cash to its own investors before raising a new fund later in the year, sources said.

Matrix, one of the India's largest venture capital firms with over a billion dollars deployed in the country, is selling 2-3% of its stake at a company valuation of $3.5 billion. After the stake sale, it will still own about 6% of Ola (ANI Technologies Pvt Ltd), said the people, who requested anonymity.

Ola's founder Bhavish Aggarwal has been more controlling than most founders, curtailing his investors' rights and boosting his own, and has blocked secondary share sales - like the one Matrix is currently executing - in the past. Matrix getting $75 million cash from its Ola shares would be a massive shot in the arm for the VC firm, which has otherwise had a relatively poor track record of exits from its investments.

However, Ola's valuation currently is subdued due to the Covid-19 pandemic, down from its peak of about $6 billion in 2019.

Matrix has had a number of small exits, but its largest exit is $60 million from classifieds platform Quikr and womenswear maker W, as per data from Venture Intelligence. In comparison, other VC firms have got hundreds of millions, if not more from the likes of Flipkart, Paytm, Oyo, FirstCry and Policybazaar, among others.

Matrix's plans to raise its largest fund yet also signals the startup and funding boom enveloping India, with record valuations, new unicorns and more money than ever before.