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Urban Ladder engages with tech startups to win e-commerce battle

Working with startups on in-warehouse drones, robots for inventory management, sensor furniture

Itika Sharma Punit  |  Bengaluru 

As competition in e-commerce heats up, online home decor and furniture curator Urban Ladder has chosen technology as a strength it will fight this battle with.

So while several of its peers are rapidly expanding their product listings, Bengaluru-based Urban Ladder says it does not want to do that. Instead the company is working with technology startups to develop software solutions that will complement its business.

Under its newly launched ‘UL Labs’ programme, where it engages with early-stage digital startups to create software solutions, Urban Ladder is working with five startups in areas such as augmented reality, drones for material handling inside warehouses, robots to control inventory, and sensors in furniture.

“We are a vertical e-commerce player, our focus is not on scale and volume alone,” said Rajiv Srivatsa, co-founder and chief operating officer of Urban Ladder. “We have to pick our bets, and for us it's only about selective products. There are several abroad which are using such technologies and surprisingly in India there are several technology-driven startups that have great ideas.

“Working with startups helps because it gives us the benefit of having access to several new and cool technologies for which we would have to spend a lot of money if we wanted to develop them in-house. For the startups, the benefit is that we can get them access to hundreds and thousands of users.”

While one would assume that research and development (R&D) around drones and robots would involve heavy investments, Srivatsa said Urban Ladder had so far not had to spend much, except for its commercial engagements with startup teams. The company is currently spending about one-third of its total expenditure towards R&D, which is a fraction of the funds the company has raised in the past.

In July this year, Urban Ladder raised $21 million in Series B funding from Kalaari Capital, SAIF Partners and Steadview Capital. The company had raised Series A funding in November 2013.

“Surprisingly when you work with early stage startups, you don't need big investments. We raised some $20 million earlier this year, but this entire engagement with startups under UL Labs should not cost us more than 5-10 per cent of that,” Srivatsa said. “We focus on early stage startups where we only need to meet the people cost. Beyond that, there is the material cost, which is not so high in India.”

On Wednesday, Urban Ladder launched a mobile application called Living Spaces, one of the products developed at UL Labs in collaboration with two Bengaluru-based startups, Whodat and House of Blue Beans, allows users to virtually place sofas in their living rooms using augmented reality.

Living Spaces is the second x launched by the UL Labs programme, after Urban Storage, which focuses on wardrobes. Srivatsa said Urban Ladder might launch a few more ideas in the coming months.

While Srivatsa refrained from sharing names of the other startups that are working with his company under the UL Labs programme, he said engagement with these startups was a commercial one with no investment or acquisition involved as of now. There is, however, a mini-exclusivity where the startups cannot work with another company in the same business as Urban Ladder. Additionally, since these are early stage startups, in several cases Urban Ladder is their only client and the founders of the startups are engaged in R&D.

Srivatsa, however, did not rule out the possibility of investments into or acquisitions of such technology startups in the future.

“The engagement on both sides is great, the natural progression could be a strategic investment and the final stage could be an acquisition. But that is really far because we are in the early stages. We just started working with our first startup some five-six months back. It will take many months for us to get to any of the next stages,” he said. “We are evaluating these ideas to take them to the next stage. So it is like the dating-phase, from where we may or may not take the relationship forward.

First Published: Thu, November 06 2014. 00:11 IST