ShopClues plans to raise $50 million

Company in talks with PE players such as Warburg Pincus, SoftBank, Digital Sky and Goldman Sachs for fund raising

ShopClues.com, India's first and the largest managed marketplace firm, is looking to raise $30-50 million (Rs 180-Rs 300 crore) in private equity (PE) investments. The Gurgaon-based company is understood to have initiated talks with PE players such as Warburg Pincus, SoftBank, Digital Sky Technologies and Goldman Sachs for this round of fund-raising, which is expected to be closed by year-end.

Sandeep Aggarwal, co-founder and chief executive officer of ShopClues, said the company was looking at one more round of "growth funding" before its plans to go public in 2016. He, however, declined to divulge the names of the PE players the company is talking to. In January this year, ShopClues had raised $10 million in a round which saw participation from Helion Venture Partners, Nexus Partners and Japanese business group Netprice.com. So far, the company has raised $16 million, including the angel round.

"We see lot of investors' interests, but we are not in a hurry. But before the IPO (initial public offering), we may raise one more round of capital, which will be our growth round. This will help us to be one of the top two largest e-commerce companies in the country," said Aggarwal. A former Wall Street internet analyst, Aggarwal started ShopClues in November 2011 with an initial investment of $250,000 when the managed marketplace model was unheard in the country. The only player offering marketplace-based e-commerce platform in India then was eBay. But, eBay was an open marketplace where the e-commerce player did not have any control over the sellers and goods being sold on the platform.

"We are India's first managed marketplace because we only allow businesses to sell with us, not individuals. We don't release money to the sellers until the buyers say they have received the products and everything is fine," said Aggarwal.

Today, ShopClues has established itself as the fifth largest e-commerce company in the country. The company claims to have the largest catalogue of products (excluding books) offered by over 11,000 merchants who have adopted ShopClues as their platform. It manages about 10,000 transactions every day.

The company now sells goods with the annual gross merchandise value (GMV) of about Rs 250-300 crore with a growth rate of over 160 times (on a six-month basis). It expects the GMV to cross about $1 billion with a net revenue of about $100 million by 2016 post which it is planning to go for a listing on Nasdaq.