Exclusive: DrinkPrime raises pre-Series A round led by Sequoia Surge

Subscription-based Water purifier startup DrinkPrime has secured Rs 21.56 crore in its pre-Series A funding round led by Sequoia Surge. The latest tranche is part of the company’s ongoing seed funding round. 

Sequoia Surge led the round with an investment of Rs 12.7 crore while ON Mauritius infused Rs 8.18 crore. AL Trust, Nikhil Jaisinghami, R Ramakrishnan, and Anand Ladsariya also invested in their capacities.

DrinkPrime has allotted 64,613 pre-series A compulsorily convertible preference shares to the backers mentioned above at Rs 3,336 per share, shows regulatory filings. 

A part of the 15 startups selected by Sequoia Surge for its third cohort in India and Southeast Asia, DrinkPrime was founded in 2017 by Vijender Reddy Muthyala and Manas Ranjan Hota. The company makes smart water purifiers by combining the internet of things (IoT) and water purification technologies.

DrinkPrime connects purifiers to the cloud and monitors the quality of water consistently. It has three monthly subscription plans and requires no upfront investment.

Post allotment, Surge controls 18.43% stake whereas Omidyar has a 10.6% ownership in DrinkPrime. AL Trust holds 1.37% equity and other individual investors who participated in this round collectively hold about 1.25%. 

According to Fintrackr’s estimates, DrinkPrime has been valued at around Rs 85 crore after the latest allotment of shares. Its promoters Reddy and Manas Hota's collective stake has been diluted from 56.2% to 41.68% post this transaction. 

The Bengaluru-based startup had received a total of around Rs 6 crore in its seed funding from a list of investors including Kunal Bahl, Rohit Bansal, and Ankit Agarwal, among others in two previous tranches in the last 12 months.

Apart from the fresh allotment of preference shares, both Surge and Omidyar also picked up shares from early backers Ganesh Subramaniam and Kapila Venkata Ramakrishna Rao.  Ganesh and Rao had picked up 4,213 and 2,808 preference shares respectively in DrinkPrime's maiden funding tranche at Rs 712 per share.

Surge and ON Mauritius have entered in a SPA( shares purchase agreement) with the two individuals, picking up their shares in a secondary transaction. While exact details of exits remain undisclosed, they have reaped in at least 3X returns on their respective initial investment.