SUMMARY
- Piyush Gupta and Norbert Fernandes launch Kenro Capital, focusing on growth secondary transactions.
- Targets profitable, IPO-ready startups in Southeast Asia and India, investing $20–30 million.
- Addresses $100B venture capital-exit gap, providing liquidity to early-stage investors nearing fund cycles.
Former Peak XV Partners managing director Piyush Gupta founded venture capital firm named Kenro Capital which specializes in growth secondary transactions to provide liquidity to investors.
In collaboration with Norbert Fernandes, a seasoned private equity specialist with over 17 years of experience investing at Temasek, IvyCap Ventures, and TR Capital, Gupta, an industry veteran, founded the new fund.
Without introducing fresh funding into the business or issuing more shares, secondary transactions involve investors exchanging shares at a price that has been agreed upon by both parties. In order to give early-stage VC investors liquidity to restore funds to their Limited Partners (LPs), secondary-focused VC firms buy shares from them.
As per YourStory, Gupta revealed that Kenro Capital would invest in businesses in Southeast Asia and India. The Singapore-based venture capital firm, which has received an unknown sum from overseas LPs, plans to invest $20–30 million in growth secondary transactions.
He further added, “There’s a gap of about $100 billion in the venture capital invested and exits monetized and with the pace of investments growing significantly over the last five years, this gap is only going to grow. The reason we are doing this now is because we are seeing the VC ecosystem maturing in India with DPI (distributed to paid-in capital) getting more prominence over metrics like returns. Startups are also moving towards profitability faster and so the IPO exit option is also becoming more viable. VCs are so more amenable to driving exits.”
According to Gupta, within two to three years of its investment, Kenro Capital will concentrate on acquiring minority stakes in growing businesses in a variety of industries that have achieved revenue scale, are profitable or nearly profitable, and have other critical characteristics that position them for a possible public listing.
Due to early-stage startup investors looking for quicker exit options outside of public listings and acquisitions, the number of secondary transaction-focused venture capital companies is on the rise, which coincides with Kenro Capital’s entry into the market.
As many VCs approach the conclusion of their first fund cycle, this trend indicates mounting pressure to return cash. Secondary-focused venture capital firms, such as Kenro, usually give early-stage VCs instant liquidity while selling stakes through a public listing or acquisition. India has long been thought to be a difficult market to quit successfully.
In contrast to buyout or private equity (PE) firms that are involved in secondary transactions, Kenro Capital will concentrate on acquiring minority holdings in startups. PEs and buyout firms, on the other hand, usually acquire substantial shares in businesses. As per YourStory Gupta and Fernandes told them that the VC will only concentrate on growth secondary transactions.
