Sequoia Capital to Divest 10.18% Stake in Go Fashion through Block Deal, Facilitated by JM Financial

• ByStartupStory     |    June 12, 2023

According to a report on Sunday, Sequoia Capital, a venture capital firm, is set to divest its entire 10.18% ownership in Go Fashion, the parent company of Indian apparel brand Go Colors, through a block deal scheduled for Monday. The stake sale will be executed at a floor price of Rs 1,135 per share, which represents a 5% discount compared to the closing price of Rs 1,194 on Friday. The block deal is expected to amount to Rs 625 crore and will be facilitated exclusively by JM Financial, as per sources. Based on the shareholding pattern disclosed to the BSE, Sequoia Capital currently holds approximately 55 lakh shares, equivalent to a 10.18% stake in Go Fashion as of March 31, 2023.

In recent days, Sequoia Capital made headlines with its decision to separate its operations in China, India, and Southeast Asia into two distinct entities, operating independently without any future involvement from Sequoia. The Chinese arm will adopt the name “Hongshan” in English, while the Indian and Southeast Asian operations will be overseen by Peak XV. Under Peak XV’s management, the portfolio will encompass over 400 companies and assets valued at $9.2 billion, which were previously under the purview of Sequoia.

Over the years, Sequoia has been a significant investor in some of India’s prominent startups, such as Zomato, a food delivery company, and Pine Labs, a payments firm. In 2022, Sequoia successfully raised $2.8 billion dedicated to investment in startups within India and Southeast Asia. 

However, the majority of the remaining amount, around $2.5 billion, will now be managed and invested by Peak XV. Peak XV has emerged as India’s largest venture capital firm and is led by former managing directors of Sequoia in the region. This restructuring coincides with a challenging period for Indian startups, as they face funding constraints that have resulted in layoffs due to concerns about inflated valuations among investors.

Until the previous year, Sequoia Capital held a 13.8% ownership stake in Go Fashion. However, in December 2022, Sequoia initiated a block deal to divest a 3.7% stake, generating Rs 228 crore in proceeds. Go Fashion experienced a noteworthy 20% increase in net profit, reaching Rs 15 crore for the quarter ending March 2023, compared to Rs 12 crore in the same period the previous year. The company’s total income for the quarter also demonstrated substantial growth, rising by 34% to Rs 160 crore, surpassing the Rs 119 crore reported in the corresponding period of the preceding fiscal year.

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