The Capital Quest | Xponentia Capital leads a $17.7 million investment in fintech startup Zype
Mumbai-based private equity firm Xponentia Capital on Wednesday said it has led an investment of Rs 146 crore ($17.7 million) in fintech startup Zype, which is guided by industry veteran and career banker Vivek Vig.
Vig has also invested in Zype as part of the financing round.
This comes almost five months after The capital mission first reported that Xponentia has virtually incubated a fintech platform. At that time, Xponentia had already committed a sum from the remaining corpus from the first fund. Now it has doubled on Zype with further commitment from the second fund.
Zype is a new age fintech platform that aims to improve access to credit for millennials and help them develop sustainable financial habits. Zype’s management team is led by Yogi Sadana, who previously led app-based lending platform CASHe and has previously worked at Trafigura, Aeries Technology, M Modal and Indian Express Group.
Yogi Sadana, founder and CEO of Zype, said: “We are building Zype, a customer-first platform where we intend to offer credit products and interactive money management tools.”
“Our focus at the moment will be to invest heavily in our technology stack, continue to look for exciting talent across multiple functions and for go-to-market operations in the coming months,” he added.
PR Srinivasan, Managing Partner at Xponentia Capital said, “The fintech future in India looks robust and with the Zype management team’s experience in technology, risk management, finance and payments, we are confident that Zype will play a key role in the fintech industry.”
The PE firm had completed the fundraising process for its first investment vehicle last year after raising Rs 350 crore besides a co-investment pool of Rs 100 crore.
It looks at assets under management of well over Rs 1,100 crore with a target of Rs 750 crore for the second fund.
The PE firm had made an initial close of Rs 365 crore, just under half of the target corpus, early this year.
Unlike the first fund, which had an average ticket size of around Rs 55 crore, the second fund will look to commit around Rs 100 crore in each company.
It invested in seven companies, besides Zype, and made its second exit, from restaurant chain operator Barbeque Nation, which put it in a good spot to raise another fund.
Xponentia had backed Barbeque Nation just before its initial public offering a year ago. It partially worked out with an estimated internal rate of return (IRR) of well over 300%, far higher than the 20-30% IRR that PE and venture capital companies are chasing.
In its first exit move last year, Xponentia scored a high IRR when Delhivery acquired Spoton Logistics. Xponentia had co-invested with Samara Capital in Spoton in a deal estimated to be worth Rs 500-700 crore at the end of 2018. It likely had around 50% IRR in this exit over a three-year period.
Xponentia has also invested in Gurugram-based full-flight simulator training company Flight Simulation Technique Centre; Easy Home Finance, a fintech company that provides loans to first-time buyers; R for Rabbit Baby Products, an online direct-to-consumer baby products brand; commercial electric vehicle manufacturer Altigreen; and in vitro diagnostics company Medsource Ozone Biomedicals.
The investment in Altigreen was part of a consortium together with Sixth Sense Ventures, Reliance New Energy, Accurant International and Momentum Venture Capital.
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