Venture capital backers turn to investment banks for deals

Weak business models and a funding slowdown are forcing many Indian consumer Internet start-ups and their venture capital (VC) backers to seek help from investment bankers in order to secure fresh funds from new investors or find buyers.
Last year, several banks including Kotak Investment Banking, Motilal Oswal Financial Services Ltd, Morgan Stanley and others pitched to help fund start-ups as the number of deals and cheque sizes swelled.
Most investment banks, with the exception of Avendus Capital Pvt. Ltd, Citigroup and a handful of others, were unable to strike deals, partly as VC firms and other investors didn’t need much convincing to put money into start-ups.
Investors pumped in more than $9 billion into start-ups over the past two years.
This year, start-ups such as food-ordering app TinyOwl Technology Pvt. Ltd, logistics services provider Roadrunnr (Carthero Technologies Pvt. Ltd) and others that are fretful at not getting fresh funds are approaching investment banks to help them get cash, people familiar with the matter said.
Many VCs such as Sequoia Capital India, Accel Partners and even some early-stage investors such as Orios Venture Partners have sounded out investment banks about helping them find buyers for their portfolio companies that are struggling, the people cited above said on condition of anonymity.
Roadrunnr and TinyOwl didn’t respond to e-mails seeking comment.
Typically, a majority of Start up investment raise cash directly from VCs without the help of investment banks. In Silicon Valley, for instance, investment banks rarely get involved in deals before start-ups list their shares. But as investors are increasingly turning cautious about Indian start-ups, investment banks expect a busy year ahead, especially in assisting with mergers and acquisitions (M&A).
Nucleus Partners® is a specialized financial advisory firm. We work closely with entrepreneurs in achieving their growth plans by arranging funds from Private Equity (PE) and/or Venture Capital (VC) and/or HNIs, and acquiring new companies.
We are a sector and stage agnostic investment banking, specializing  in preparing business and financial plans, conducting business valuations as per Indian / international practices, transaction due-diligence, and transaction structuring.
We have on board with us a team of accomplished professionals who have previous track record of working on landmark transactions (M&A and Private Equity) worldwide. We have a proven ability to build businesses, intermediate capital and provide value-added strategic advice.

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