Mumbai: Smartphone care and warranty provider Servify is in early talks with venture capital and private equity firms to raise $100 million, before it joins the swelling crowd of startups rushing to the public markets.
The Mumbai-based startup is eyeing the fundraise at a potential valuation of $1 billion, as it prepares for an initial public offering of shares in 24 months, said two people with knowledge of the development, requesting not to be identified.
Servify has mandated Kotak Investment Bank for the fundraise, one of them said, adding that the startup, which already has a significant overseas presence, will likely use the fresh capital to expand to new markets.
“This is a (fundraising) round prior to the pre-IPO one. It is largely primary with some secondary where a few early investors might cash out,” the second of the two persons said. “We might see some Esop (employee stock ownership plan) buyback also as part of the secondary sale.”
Employees of unlisted startups made a tidy sum from their ownership of employee stock options (Esops) in 2024, with 26 such companies buying back the Esops in pre-listing and secondary transactions. Data analyzed by equity management platform Qapita showed the number was 19 in 2023, but was higher at 37 startups each in 2021 and 2022, Mint reported in December last year.
Funding history
Late-stage funding, too, saw a revival in 2024, with $5.4 billion raised from 85 rounds compared to $5.1 billion from 75 rounds a year ago, according to data from Tracxn. Much of this recovery happened on the back of pre-IPO rounds that were a mix of primary and secondary transactions.
Servify is backed by venture investor Iron Pillar, asset management firm Singularity Growth Opportunity Fund, and investment firm Bajaj Holdings, among others.
The startup was valued at about $850 million when it raised $65 million in 2022 as part of its Series D funding round led by Singularity Growth, AmTrust, and Pidilite promoters’ family office. Last year, Servify raised $10 million in debt. Founded in 2015, the startup has so far raised about $135 million.
Servify’s founder and chief executive Sreevathsa Prabhakar declined to comment on the fundraising plans. A Kotak spokesperson did not respond to Mint’s queries.
Servify has operations globally, including in North America, the European Union, the UK, Turkey, and the UAE. Founded by Prabhakar, Servify offers damage protection, extended warranty, and trade-in services for users of Apple, Samsung, Xiaomi, OnePlus, Nokia and other devices.
Servify’s revenue in 2023-24 jumped to ₹759 crore from ₹611 crore in the year prior, show data from Tracxn. It also significantly narrowed its loss to ₹94 crore in FY24, from ₹229 crore in the previous year.