Whalesbook
Investing in Deeptech
The ₹250 crore commitment to A88 Fund I, managed by subsidiary Smartweb Internet Services, marks a significant step into India's burgeoning deeptech sector. Launched in February 2026 with a 12-year lifespan, the fund targets early-stage ventures. This investment aligns with a national trend where deeptech funding surged 37% year-on-year to $2.3 billion in 2025, with AI dominating over 90% of that investment. Info Edge, valued at approximately ₹64,300 crore, aims to capture growth from this evolving technology landscape, especially as broader tech funding grows more selective.
Selling the Retail Tech Unit
In a move to rebalance its portfolio, Info Edge is selling its full 26.14% stake in Shopkirana E Trading Private Limited for about $32.97 million. The buyer is Singapore-based Trustroot Internet Private Limited (TIPL). This divestment frees up capital and reduces the company's exposure to the mature retail tech segment. It comes as the startup exit market sees a shift, with M&A activity increasing alongside IPOs. This is particularly relevant as investors increasingly scrutinize valuations of 'new-age tech' companies, where retail investors have faced losses.
Strategic Pivot Explained
Info Edge's strategy reflects a deliberate pivot from established businesses toward high-potential technology ventures. Divesting from Shopkirana simplifies its portfolio and generates capital, while the A88 Fund investment positions the company for India's deeptech growth, particularly in AI. This shift aims to secure long-term value by focusing on disruptive technologies. Unlike volatile 'new-age tech' IPOs that have seen investor losses, Info Edge is strategically allocating capital across the tech lifecycle. The company's stock has declined approximately 26-31% in the past year, underperforming market indexes, making this strategic realignment crucial for future prospects.
Risks in Early-Stage Tech
Investing in deeptech offers potential rewards but carries significant risks, as many early-stage startups fail to secure later funding. Info Edge's investment in A88 Fund I means exposure to this inherent volatility. Investor caution is also evident in the company's stock performance, which has dropped about 26-31% over the past year, underperforming benchmarks. Analyst ratings are mixed, with some holding 'Hold' or 'Sell' recommendations, though the general consensus is 'Buy'. Info Edge's projected earnings growth has faced challenges, with some forecasts indicating declines. The intense competition requires continuous innovation and careful capital deployment for sustained market leadership.
Analyst Outlook
Despite recent market pressures, analyst opinion on Info Edge remains largely positive, with most recommending a 'Buy'. The average 12-month price target suggests a 40-50% potential increase, aiming for ₹1,435 to ₹1,500. This optimism is driven by its strong recruitment business, growth prospects in other verticals, and strategic investments in deeptech. Info Edge's ability to navigate the high-risk, high-reward deeptech sector, alongside its established businesses, will be critical for achieving these targets.