Darwinbox’s early investors look to exit at a 10-15% discount amid SaaS slowdown

livemint.com:

‘Innovation will be key differentiator in SaaS’ In a secondary transaction, existing shareholders sell shares to other existing investors or new ones, and no new capital is injected into the company itself. Secondary transactions generally take place at a discount to the primary shares. In 2022, a $72 million Series D funding round led by Technology Crossover Ventures (TCV), made Darwinbox a unicorn – a private company valued at more than a billion dollars.

In January 2023, the company raised an undisclosed amount from Microsoft and SBI at the same valuation, as part of an extended Series D round. Spokespersons for Peak XV, Lightspeed, Endiya, Darwinbox and StartupXseed did not respond to Mint’s queries. In November 2022, Darwinbox’s co-founder Rohit Chennamaneni said the company aimed to become profitable and go public by 2025.

But software-as-a-service (SaaS) firms have seen their growth slow down and valuation multiples taper in recent years as clients have slashed budgets and turned cautious amid a sluggish global economy. This, along with delayed sales cycles and the growing availability of artificial intelligence-related solutions, has forced many SaaS startups – including Yellow.ai, SpotDraft and Plotline – to experiment with new pricing models. The second person cited above said, “Many early-stage investors want to take some money off the table and return capital to their LPs (limited partners).