New Delhi, June 16 -- Venture capital firms Nexus Venture Partners and Peak XV Partners will generate strong returns on their investments in Turtlemint Fintech Solutions Ltd but some of the company's late-stage investors are staring at paper losses as it goes public at a sharply lower valuation than its last private funding round four years ago.

Mumbai-based Turtlemint, a tech-enabled insurance distributor, is floating an initial public offering that opens on June 19 and closes on June 23. The IPO comprises a fresh issue of Rs 660.7 crore and an offer for sale of 14.6 million shares by its founders and investors at a price band of Rs 144-152 apiece, per its red herring prospectus.

While the company has kept the size of the fresh issue unchanged from before, when it filed draft documents in January, it has slashed the offer for sale by almost half from 28.6 million shares earlier.

At the upper end of the price band, the offer for sale would be Rs 221.9 crore and the total issue size would be Rs 882.65 crore ($93.3 million). Turtlemint would command a post-IPO valuation of Rs 4,476 crore ($473 million), back-of-the-envelope calculations show.

That's more than a third lower than its valuation in 2022 when it raised Series E funding. The company scooped up Rs 916 crore (about $120 million then) at the time at a valuation of around Rs 6,150 crore, or around $790-800 million based on the prevailing forex rates.

The Series E round included at least three new investors-Singapore-based Amansa Capital, London-based private equity firm Vitruvian Partners and hedge fund Marshall Wace. These three firms are not selling any shares in the IPO but their investments are now underwater since the company's valuation has fallen.

The round also included several existing investors such as Jungle Ventures, Nexus Venture Partners' sixth fund, Dream Incubator, American Family Ventures, Blume Ventures, Granite Asia (earlier GGV Capital) and Susquehanna Asia Investments. Of these, American Family Ventures and Susquehanna are not taking part in the IPO. Jungle Ventures and Nexus' sixth fund had previously planned to join the offer for sale but have now dropped their plans. Blume has lowered the number of shares it plans to sell while Granite Asia and Dream Incubator have kept their share-sale plans unchanged.

Blume Ventures, which has invested in the company via two funds, will earn nearly Rs 18 crore from the partial exit. Currently, the VC firm owns a 4.7% stake in Turtlemint.

Granite Asia will mop up Rs 18.12 crore and Dream Incubator will generate Rs 3.1 crore. The two VCs first invested in Turtlemint in 2020 as part of the Series D round. They will churn out an internal rate of return of around 16-17% in rupee terms, according to VCCircle estimates based on the first-in, first-out methodology. That misses the minimum 20% IRR that VC and PE firms typically target in local currency.

The big winners

Nexus is the earliest and largest shareholder in Turtlemint. It holds a 21.68% stake in the company through its fourth fund. The VC firm first invested in Turtlemint's Series A round in 2015 through this fund. The fund doubled down in 2016, 2018, 2019, and 2020. Overall, the fourth fund invested Rs 95 crore in Turtlemint.

Nexus's fourth fund will sell up to 2.7 million shares, or just 5% of its holdings, and will mop up Rs 41.76 crore. The fund will clock an IRR of about 37% in rupee terms and a multiple on invested capital (MOIC) of 32x, per VCCircle estimates based on the first-in, first-out methodology.

Nexus also invested in Turtlemint via its sixth fund, co-leading 's the startup's last external funding round in 2022. This fund owns a 2.37% stake in the company.

Peak XV first invested in Turtlemint in December 2016 as part of the Series B round. The VC firm reinvested during the Series C and D rounds in 2018, 2019, and 2020. In total, it invested Rs 111.5 crore in Turtlemint.

Currently, Peak XV is the second-largest institutional shareholder and holds a 20.84% stake in the startup. It will sell about 4.36 million shares and mop up Rs 66.2 crore. It will log an IRR of 31% and an MOIC of 13x through the partial exit, per VCCircle estimates.

VC firm Hummingbird Ventures, which also invested in Turtlemint in 2016, and holds a 1% stake in the company, will clock a similar return on its investment as Peak XV.

Turtlemint, founded in 2015 by former Quikr executives Dhirendra Mahyavanshi, Anand Prabhudesai, and Kunal Shah, operates a hybrid online-offline model that enables insurance advisors across the country to use digital tools to streamline what is otherwise a largely offline sales process.

Shah, who served as a chief technical officer and co-founder, exited the company in December 2020. He currently holds a 1.4% stake in the company, and plans to dilute 15% of his holding stake via the IPO.

The company's net loss widened to Rs 187.3 crore in the first nine months of FY26 from Rs 155 crore a year earlier. Its revenue from operations rose to Rs 741 crore in April-December from Rs 411 crore a year earlier.

Published by HT Digital Content Services with permission from VC Circle.