Caratlane: Anatomy of a glittering exit
Zomato and Nykaa, have their net worth tied up in their companies’ shares. The Bansals of Flipkart are an exception, having pocketed over a billion dollars each in cash from the sale of their stakes to Walmart, between 2018 and 2021. With this deal, the ecosystem will have its third such cash-rich startup founder.
Sacheti agreed to sell his 27% stake in Caratlane to Titan for over ₹4,621 crore on Saturday, in a deal that will take the latter’s stake in the business to over 98%, and value Caratlane at over ₹17,000 crore ($2 billion). This is the final part of a transaction that was first struck in 2016, when Titan acquired a 62% stake in the company from Tiger Global for ₹357.24 crore, then valuing Caratlane at ₹576 crore. In 2016, Tiger Global barely made a profitable exit.
The hedge fund invested a total of ₹302 crore across four tranches beginning 2011, and exited with a small profit in 2016, less attractive in dollar terms, according to VCCircle and VCCEdge reports of the time. Since then, Caratlane has grown exponentially under the Tata umbrella. It is also the only company within the Tatas’ startup portfolio that is profitable.
The group has acquired online grocer Big Basket, online pharmacy 1MG, and a stake in online gym platform Curefit in recent years—they’re not profitable yet and, to be fair, are still a work in progress. In financial year 2022-23, Caratlane registered a turnover of ₹2,169 crore against the previous year’s ₹1,256 crore. And it recorded a profit before tax of ₹119 crore against the previous year’s ₹39 crore.
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