Piyush Gupta, the former Managing Director at Peak XV Partners, has announced the launch of Kenro Capital, a new investment firm aimed at capitalizing on secondary transactions. This move is in line with a larger shift in the venture capital landscape, where firms are increasingly seeking exit opportunities after contributing billions to the growing Indian startup ecosystem.
Gupta, who serves as the founder and managing partner of the firm, is joined by Norbert Fernandes, previously a director at TR Capital, as a partner in this new venture.
Kenro Capital plans to acquire minority stakes in growth-stage businesses across India and Southeast Asia, with a particular focus on companies poised for a public listing within two to three years of investment.
Although Gupta did not specify the exact size of the fund, he indicated that Kenro Capital aims to invest $20-30 million in each deal.
“We aim to fill a critical gap in the market by offering liquidity solutions to stakeholders. The venture capital sector in India and Southeast Asia has seen significant growth in the last 15 years, and with that, VCs are increasingly focused on accelerating returns for their limited partners—this is where Kenro Capital comes in,” Gupta explained.
In April, Gupta stepped down from Peak XV Partners, where he led a team supporting portfolio companies with fundraising, M&A, and IPO initiatives. He noted that the secondary market for venture-backed companies in India has exceeded $100 billion, with a record $13.5 billion in secondary transactions recorded in 2023—up from $9.1 billion the year before.
Secondary transactions involve the buying and selling of stakes between existing and new investors, without the capital entering the company. These deals often occur at a discount to the company’s market value.
Gupta mentioned that the discounts for such transactions have been shrinking. In 2023, the average discount was 3.1%, down from 4.8% in 2020.
“With a surge of primary capital entering the market and the IPO exit process gaining momentum—albeit slowly—many funds are shifting their focus towards exits. We believe the time is ripe for secondary solutions,” Gupta added.
Kenro Capital’s debut comes as secondary transactions continue to rise in India, with prominent companies like Lenskart, Meesho, Purplle, Urban Company, and Healthkart leading the charge.
In a similar vein, Oister Global, a Gurugram-based investment firm, joined forces with Tribe Capital from Silicon Valley in September to launch a fund dedicated to secondary deals.
Fernandes emphasized the recent shift in the pace at which general partners are considering secondaries to monetize their investments. “Limited partners are increasingly focused on cash returns and are looking for more predictable timelines. The urgency to see cash returns is becoming critical,” Fernandes said.
He also observed that Indian startups have matured, with many now profitable. “Venture-backed founders are gaining a clearer understanding of the capital markets and the steps needed to prepare for an IPO,” Fernandes added.