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According to four sources privy to the details who spoke to Moneycontrol, a funding deal of $50 million (roughly Rs 425 crore) between the automated investing app Jar and a group of investors led by Dutch finance monster Prosus has hit a snag following disagreements over valuation.
“A Jar investment sought $300-350 million (Rs 2,500-2,900 crore) while investors were offering $200-250 million (Rs 1,700-2100 crores), making it impossible to reach consensus,” one of the persons cited above said.
The Prosus consortium's Arkam Ventures, and Susquehanna International Group which previously backed Tiktok, Jar's main competitor, Tiger Global Technologies were also among Jar’s earlier investors. Not has it been disclosed if Jar managed to close the deal or it was postponed further down the line.
Moneycontrol's requests were ignored by Prosus, Arkam Ventures, Jar, and SIG.
No secondaries
Aside from a valuation misalignment, Jar founders, Nishchay Ag and Misbah Ashraf, attempted to offload some of their shares via secondary sales to which the new investors were not in agreement, at least until they made an exit first.
“That was another key reason why deal negotiations are stuck. In Jar’s case, I believe it should not be tough to achieve some level of agreement on secondary sales, particularly when the founders have around 40 percent,” said a third person privy to these developments.
However, “the investors were not okay with the founders cutting down their share at the Series C stage. As it is, motivation already has some skepticism around it,” the person continued.
Allowing founders to sell shares has been a fraught issue within the Indian startup ecosystem because some founders take advantage of it for personal financial reasons. While some, like Freshworks’ Girish Mathrubootham, have permitted founders cashing out to tend to personal financial obligations so that they are unencumbered to concentrate on growing their companies, others have not supported the move at all.
Also, Prosus’ reluctance comes from previous experiences with founders who sold their shares in secondary markets. Two of Prosus’ India portfolio startups, Byju’s and Good Glamm Group, caused some trouble when their founders repeatedly sold off portions of equity through secondary sale transactions.
Jar looks to IPO
While there is no resolution in sight for Jar's conflict with the investors, it is also getting ready to work with bankers for a planned public listing in 2026 and doesn't want to raise money at this stage, as per Moneycontrol.
“Put it this way, unless the investors push up thier valuation, the deal is off the table,” one of the sources shared.
Jar is set to meet investors later this week but we’ll be surprised if a meaningful deal happens, as the participants have decided there will be no deal for the foreseeable future, another participant said.
It is likely that Jar is also asking for a higher valuation because the company has turned profitable since deal negotiations first began, and management is hoping that public market investors would be more generous.
On January 30, X (formerly Twitter) saw Jar co-founder and CEO Nishchay Ag saying Jar “...became profitable…” but without going into details. About a month earlier, around the latter part of 2024, he had shared on the internet that the company shifted from an annualized revenue run rate (ARR) of Rs 23 crore in December 2023 to an impressive Rs 270 crore by December 2024 due to diversification of revenue sources.
Jar has not yet submitted its complete financials for the FY25 year, morning context has never thought to provide a guess as to what the loss figure might be. Most likely, the company continues to be loss making for the entire fiscal year. As per Jar’s regulatory documents, for FY24, the revenue stood at approximately Rs 50 crore which was a year-on-year growth of nearly 5.5X, while the loss for the company reduced 16% to approximately Rs 104 crore.
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