Glossary
MOIC
Multiple of Invested Capital—total cash returned divided by total cash invested.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
MOIC (Multiple on Invested Capital) measures how many times an investor's original capital has been returned. If you invested ₹1 crore and got back ₹3 crore, your MOIC is 3x. It's calculated as: Total Value Returned ÷ Total Capital Invested.
MOIC differs from IRR in one key way: it ignores time. A 3x return in 2 years looks identical to a 3x return in 10 years on the MOIC metric. IRR accounts for speed—how fast money came back matters. For early-stage VCs in India, MOIC is often quoted because exits are unpredictable; IRR requires reliable timeline data.
In portfolio analysis, MOIC is useful for comparing fund performance across different vintage years. Indian VCs targeting 3-5x MOICs over 7-10 years on seed/Series A funds is standard. Large exits like Flipkart (₹75,000+ crore valuation) returned 50x+ MOIC to early backers, though this is exceptional.
India Context
Indian VCs typically report MOIC because fund life cycles are irregular—exits happen unpredictably due to regulatory delays, founder pivots, or acquisition timelines. The Securities and Exchange Board of India (SEBI) Alternative Investment Fund (AIF) regulations require funds to report MOIC-like metrics (Net Value Added per unit) in annual statements. This makes MOIC a standardized language between LPs and GPs in India.
Unlike Silicon Valley where IRR dominates (time-weighted returns matter), Indian VCs face longer fund deployment periods due to market immaturity. A 3x MOIC over 12 years (1.11x IRR) is still a decent outcome in India—better than fixed deposits (6-7% annually) but lower than US benchmarks. Tier-1 Indian VCs (Accel, Sequoia, Lightspeed) target 3-4x MOICs on VC funds; angel networks and smaller funds aim for 2-3x.
Example
Accel invested ₹5 crore in Swiggy's seed round in 2014. By the time Swiggy became a unicorn in 2018, that stake was worth ₹150+ crore. MOIC: 30x. Now contrast with a smaller exit: an angel might invest ₹50 lakh in an early SaaS startup, exit at ₹2.5 crore after 6 years. MOIC: 5x. Both are solid, but the time horizon differs drastically—yet MOIC treats them similarly. This is why Indian VCs pair MOIC with IRR for serious decision-making.
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