Learn more about how Narayana and Sudha Murthy profited Rs 915 crore when they left their joint venture with this business

Narayana Murthy and his wife Sudha Murthy, the co-founders of Infosys, recently made news when they sold their 76% ownership in Cloudtail for Rs 1,332 crore ($160 million) via their investment company, Catamaran. This signified their dramatic departure from a business they had financed in around eight years before for Rs 417 crore ($50 million). A considerable profit of Rs 915 crore, or around $110 million, was made from the transaction, amounting to a strong return on investment (ROI) of three times. The expansion and prosperity of Cloudtail was the cause of this significant profit.

In 2014, Catamaran and Amazon India formed a joint venture called Cloudtail, whose objective is to educate and onboard merchants for Amazon’s e-commerce platform. It became as Amazon’s biggest retailer over time. However, due to modifications in e-commerce laws prohibiting marketplaces from directly owning its merchants, Amazon had to reduce their 49% investment to 24%. Consequently, this gave Catamaran the chance to raise its ownership in Cloudtail.

Because of its financial success in FY19 and FY21, Cloudtail was able to get a loan from HSBC in FY22 for Rs 1,750 crore ($211 million). Despite its popularity, Cloudtail had difficulties; in 2021, it was declared that it will stop operating as a merchant as of 2022. Sales at Cloudtail fell from over Rs 19,000 crore ($2.3 billion) in March 2022 to Rs 3,100 crore ($370 million) in March 2023 as a result of this shift in strategy.

Catamaran has invested in a number of businesses over the last ten years, in addition to Cloudtail: Elon Musk’s SpaceX, Paper Boat, Acko, Udaan, Dailyhunt, Reddit, deep-tech energy startup Log 9, and B2B e-commerce company Udaan. Generally speaking, Catamaran prefers tiny, minority stakes—typically less than 5–10%—which characterizes these investments.