As the COVID-19 pandemic hit businesses extremely hard, bootstrapped startups went under and those survived were left struggling. However, things are starting to change with lockdown restricted lifted. But as it appears, one VC in a startup that was severely impacted by the lockdown backed off, even if it meant taking a hefty haircut.
Sequoia Capital India reportedly exited from the Bengaluru-based car and bike pooling platform Quick Ride. The development was reported by Entrackr citing two anonymous sources. The same sources also revealed that Sequoia exited with 40-50 percent of what it had invested in two rounds of funding in the startup.
Quick Ride had raised Rs 25.2 crore from Sequoia in Series B round of funding but had also raised an undisclosed sum in the Series A round, making it an early backer of the platform.
COVID-19 lockdown effect?
According to an Entrackr source, Sequoia exited from Quick Ride late last year after taking a significant hit, something that is unusual for any mainstream venture capital firms. It appears the COVID-19 induced lockdowns had triggered the move.
"It's surprising that Sequoia has taken an exit from a company with a 50% haircut. All ride-sharing businesses, including Quick Ride, were severely affected due to the Covid-19-induced lockdown and its aftermath. This could be the major reason for exiting from Quick Ride," said the second source who wished not to be named.
Quick Ride was launched in 2015 and had its operations in various cities including Bengaluru, Chennai, Hyderabad, Pune, Mumbai, Delhi-NCR, Kolkata, Kochi, and Thiruvananthapuram. As of December 2019, the startup had 3 million registered users and had completed 27 million carpools in the same year. But the COVID-19 pandemic hit the operations hard, making it difficult to reach even half of its previous targets in 2020.