New Delhi, Aug. 6 -- Peak XV Partners and Elevation Capital, two of India's best-known venture capital firms, have hit the exit button on their investment in a domestic ecommerce player and pulled out $100 million each in what is shaping up to be a jackpot for them.

Both VC firms sold a small chunk of their holding in Meesho Ltd via open market transactions. They divested 52.4 million shares each-which represents a 1.1% stake in Meesho- and pocketed Rs 974.6 crore ($102 million) in the process, according to stock-exchange data.

For Elevation Capital, which was one of the earliest backers of Meesho and currently its largest institutional investor, the sale clocked a 61x multiple on invested capital (MOIC) on a nine-year old investment. This adds to its earlier harvest of Rs 271 crore from the company at the time of Meesho's initial public offering last year. The previous sale had generated an MOIC of 37x.

Meesho went public in December last year and raised Rs 5421.2 crore ($604 million) at a valuation of $5.6 billion. Its IPO was one of the most sought-after public issues in the country, receiving about 82x subscription. Elevation changed its plan in the run up to the IPO and ended up divesting less than half of the 55.4 million shares it originally planned as the company settled on a lower valuation than what it was targeting previously in October.

With this latest sale, Elevation has sold more than what it intended at the time Meesho had filed its draft papers. Further, it has churned out Rs 1,246 crore ($132 million), or about seven times the capital it invested overall.

It had first invested in Meesho in 2017 and doubled down in later rounds. Overall, the VC firm is likely to have infused Rs 176.2 crore, based on its weighted average cost of acquisition in the red herring prospectus. Its remaining stake is worth Rs 9,359 crore ($982 million), which will likely make this a billion-dollar outcome.

Similarly, Peak XV, previously known as Sequoia Capital India and Southeast Asia, first backed Meesho in 2018 as a part of its $11.5 million Series B round.

The VC firm held nearly 12.9% stake in Meesho at the time of the IPO. It divested a small portion of its stake-about 24.45 million shares-at the time of Meesho's IPO and pocketed Rs 193 crore.

In the latest sale, it has sold 52.4 million shares and encashed Rs 974.6 crore, clocking a 43x MOIC compared to its weighted average cost of acquisition. Its overall harvest from Meesho currently stands at Rs 1,168 crore. Its remaining stake is worth Rs 8,858 crore ($920 million).

Meesho, founded in 2015, was part of American startup accelerator Y Combinator's summer 2016 cohort. It was founded by Vidit Aatrey and Sanjeev Kumar in 2015. It enables small businesses and entrepreneurs to sell their products directly to customers on the platform. It also counts names such as SoftBank, Venture Highway, and Prosus among its investors.

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