Temasek in talks to invest in Cure.fit at $800 million valuation

MUMBAI : Singapore’s state investment arm Temasek is in talks to invest up to $100 million in health and fitness startup Cure.fit, said two people aware of the matter, requesting anonymity, as Temasek looks to diversify its strategy and back more tech startups

Cure.fit is seeking a valuation of about $800 million post the fundraise, up from the $575 million it was valued at less than six months ago, the people added.

“Temasek is actively scouting for late stage technology investments in India and wants to cut cheques of at least $75 million. Cure.fit needs the capital to grow its food and diagnostics plays, and the deal is expected to close in 6-8 weeks," said the first of the people cited above.

Cure.fit was founded in 2016 by Mukesh Bansal, co-founder of fashion retailer Myntra, and Ankit Nagori ex-chief business officer at Flipkart. Bansal and Nagori worked closely at Flipkart after the company bought Myntra in 2014. CureFit now owns gyms under the CultFit brand, and offers a range of healthy food options under Eat.fit, mental wellness programmes through Mind.fit and diagnostic centres through Care.fit.

A spokesperson for Temasek said that the firm does not comment on market speculation and rumours, while Mukesh Bansal did not reply to an email seeking comment.

Cure.fit which is present in 16 Indian cities, primarily via its gym centres, aims to be a full-stack provider of health and fitness services. Its eat.fit food services are already providing Rs10-15 crore a month in revenue, said the people cited above.

Temasek’s interest in Cure.fit is a part of its strategy to deploy more in Indian technology companies. Its tech investments in India so far include ride hailing firm Ola, IT services firm UST Global and payments machine firm Pine Labs. The investor is also leading a $220 million round in online pharmacy PharmEasy, The Economic Times reported on July 10.

The investment firm’s India portfolio stood at $11 billion as on 31 March 2019, compared to nearly $10 billion a year ago. In FY19, the Singapore firm invested $400 million in the National Investment and Infrastructure Fund (NIIF), a fund set up by the government of India to boost infrastructure financing in the country. It also bought stakes in AU Small Finance Bank Ltd, Ascendas India Logistics Programme, Adani Ports and Special Economic Zones Ltd

The Cure.fit deal also represents a broader trend where startups are looking beyond Japan’s SoftBank, for late stage capital. Mint reported on September 3 that pension and sovereign wealth funds are moving in, loaded with money, risk appetite and willingness to wait for long. Funds such as Canada’s CPPIB and CDPQ and Singapore’s GIC are looking for more startup bets given their chance to provide far larger exits worth billions of dollars in a short time compared to more traditional private equity-backed firms.

“We see more pension and sovereign investors looking at tech because their traditional investment areas such as infrastructure, real estate and financial services have shown sluggishness," said Siddharth Shah, partner and law firm Khaitan and Co.

For these large funds, cheque sizes are also important. “Today, startups in India are showing the scale where they can absorb large amounts of capital, making it more attractive for these investors. Even earlier tech had attractive exit multiples, but today they also promise large exits in absolute amounts," he added.

In an interview with Mint in July, Temasek’s India head Ravi Lambah said that it wants to increase its exposure in India, with a focus on the consumption theme in sectors that feed into that theme, such as financial services, technology, healthcare, infrastructure, retail and fast moving consumer goods.