MUMBAI – Online marketplace ShopClues said it has raised fresh capital in its fifth round of financing, led by Singapore’s sovereign wealth fund GIC. Existing investors Tiger Global and Nexus Venture Partners also participated in the latest fund-raise, which the company says takes its post-money valuation to $1.1 billion, catapulting the e-tailer into the unicorn club. Unicorns are privately held tech companies valued at a billion dollars or more, with the likes of Flipkart, Snapdeal and Ola being the early entrants.
In January 2015, ShopClues had raised $100 million in a round led by Tiger Global at a valuation of around $350 million. Its valuation has since trebled.
ShopClues did not disclose the amount it has raised in the latest round but sources privy to the matter put it in the range of $100-150 million. GIC, the new investor in ShopClues, is also a shareholder in Flipkart. New York-based Tiger Global is also the largest shareholder in Flipkart, which means the e-commerce rivals have two common investors. This may eventually pave the way for some sort of consolidation in the market; people speculated post the announcement on Tuesday.
ShopClues, which caters largely to customers in tier 2-3 cities and stocks wares of small- and medium-sized merchants, said it will use fresh capital to strengthen its tech backbone, logistics infrastructure and will get on board more merchants. The four-year-old etailer was founded by Sandeep Aggarwal, Radhika Aggarwal and Sanjay Sethi. “We closed December 2015 with $750 million in gross merchandise value, or GMV, and our target is to finish this financial year with $1.2 billion in GMV. In terms of profitability, we should be ebitda-positive by the end of this year and then, accordingly, plan for an IPO next year,” Sethi, CEO and co-founder, ShopClues, told TOI.
The company aims to clock over $3 billion in GMV by 2017 before going public. GMV is the value of goods sold on an e-commerce platform without factoring in discounts and returns – only a percentage of the sales comes to the online retailer.
The Indian e-commerce market, which had been a three-way fight between Amazon, Flipkart and Snapdeal till not very long ago, has seen Paytm and ShopClues challenging the bigger players. With fresh funds in its kitty, ShopClues emerges as a formidable challenger to the incumbents.
Sethi claimed ShopClues has around 3.5 lakh sellers across non-metro cities and derives 70% of its sales from tier 2 and tier 3 centres. “These towns will continue to drive our major sales as that is our key focus. In order to fulfil our growing scale, we would have to hire another 500 people,” he said, adding to the present 1,000 employees. ShopClues recently launched services for sellers, including working capital loans, ShopClues Connect (chat services), neighbourhood market (hyperlocal discovery platform), logistics and payment services, besides other initiates to drive its scale among merchants.
