Bangalore-based fashion and lifestyle products focused e-commerce venture Myntra had raised around $25 million investment from existing investors like Tiger Global and Accel Partners among others. Myntra has confirmed this investment to Medianama and said that this investment happened late last year.
While Myntra declined to comment on the exact investment amount raised, the company said that it has raised around $65 million investment until now. Excluding this investment round, the company has raised three investment rounds till now – a $21 million round in Feb 2012, a $14 million round in March 2011 and a $5 million round in November 2008. As per our calculations, this comes to about $40 million, indicating that the company has raised around $25 million investment in the latest round. Do note that Myntra had raised undisclosed amount of funding from Accel Partners (which had previously backed Myntra as Erasmic Venture Fund) and Mumbai Angels in 2007, however it was a seed round.
This investment was first reported by PTI (via The Hindu Business Line) citing Myntra co-founder Ashutosh Lawania, although contrary to what the report says, Myntra has not raised $65 million recently, rather Myntra has raised $65 million since its inception.
The company plans to use the investment raised to improve its back end infrastructure and to expand its operations across the country. Myntra currently claims to have tie-ups with over 500 leading fashion and lifestyle brands in the country such as Nike, Adidas, Puma, Lee, Levis, Arrow, Biba, FabIndia, and Timberland among others.
This investment becomes more significant in face of the current e-commerce scenario in the country, where investors have become more selective about which company to back after the initial e-commerce boom. Some sites like Pepperfry and HomeShop18 are being funded while several others are being shut down or merged to reduce the cash burn.
Last November, Myntra had also acquired private label SherSingh.com and Exclusively.in, the parent company of Sher Singh, which shared common investors like Tiger Global and Accel Partners. Other prominent shutdowns or merger include UrbanTouch shutdown, Zovi-Inkfruit merger and Flipkart’s acquisition of LetsBuy followed by LetsBuy shutdown few months later.
Myntra Marketplace: Another point worth noting is that Myntra is probably one of the few remaining e-commerce ventures which hasn’t pivoted to a marketplace model like its competitors Flipkart, Infibeam, Snapdeal, BuyThePrice, and Healthkart among others, in order to comply with India’s FDI rules which prohibit foreign investment in e-commerce (Marketplaces can raise investments under the current FDI norms). However, the company is considering to launch a hybrid marketplace model in the future.
Elaborating on this, Myntra informed that it is not currently exploring a marketplace model since it believes that unlike other categories like Electronics and consumer goods which can be sold by third party retailers, Fashion category requires completely branded goods which will be a major challenge in the marketplace model. It also noted that a marketplace model will lead to a brand overlap on the website, due to which it is skeptical of launching a marketplace. However, it is considering a hybrid marketplace sometime in the future, which can act as an additional revenue channel for the company.
– We’re The Only Company In The Space That Has FDI Approval – Homeshop18 CEO Sundeep Malhotra
– A Rant On India And E-Commerce
– Sanjeev Bikhchandani: Not Enough Indian Capital To Support E-Commerce In India
– The Funding Environment For E-Commerce In India – K Vaitheeswaran, IndiaPlaza
Do read our white paper explaining the Structuring of Foreign Direct Investments In eCommerce in India.