One of India’s earliest e-commerce ventures Indiaplaza is on the verge of pulling the plug after failing to raise fresh funds, reports TechCircle citing a source close to the development. Medianama had heard the same from sources and we had tried to contact Indiaplaza founder and CEO K Vaitheeswaran several times over last month, however he hasn’t responded to our emails, calls or SMS yet. (We checked today as well).
Indiaplaza had last raised capital in April 2011, when it had raised $5 million from Kalaari Capital (earlier IndoUS Venture Partners). Speaking to Medianama, Vaitheeswaran had told in March 2013 that they were looking for funding in the region of $5 million, but they were struggling to raise funds since investors are spooked by India’s FDI policy disallowing foreign investment in e-commerce, although they are a marketplace in which FDI is allowed. There were also rumors of layoffs in the company, however Vaitheeswaran had denied they were laying off people. Instead, he had informed that people were leaving on their own accord and they’ve frozen hiring until the fundraising happens.
Interestingly, the report mentions that the company has sent an notice to all its vendors to settle their final dues and Kalaari Capital managing director Vani Kola had told the publication that they are no more a part of Indiaplaza.
Previously known as Fabmall.com, Indiaplaza offers products like apparel, mobiles, books, home appliances, baby products, cameras, cakes, electronics, gift articles, home decor, health & beauty and sports products among others. Over the past few months, we had however noticed that several products had remained out of stock and several categories had disappeared, although the site is still live at the time of writing this article.
Launched in 1999, the company became popular in the early to mid-2000′s as Fabmall.com. But after Fabmall’s parent offline retailing business was acquired by the AV Birla group in 2007, the online venture separated , acquired US based Indiaplaza.com, and rebranded as IndiaPlaza. Initially, it had two websites – Indiaplaza.in which targeted the Indian customer and Indiaplaza.com, which targeted the US market. But both were merged into a single website Indiaplaza.com in February 2011.
VC Picking Their Bets: Its quite clear that venture capitalists are picking their bets in the e-commerce segment, after India’s FDI policy disallowed foreign investment in e-commerce. While e-commerce ventures like Flipkart, Snapdeal and Myntra have raised significant amount of funding from investors over the past few months, around 15 – 20 e-commerce companies have shut down or been acquired in the past year.
– The Funding Environment For E-Commerce In India – K Vaitheeswaran, IndiaPlaza
– A Rant On India And E-Commerce
– India’s E-commerce Deadpool – Till June 2013
– Flipkart Founders On Plans, Marketplaces, Categories, Regulation, Disbelievers Post $200M Fundraising