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August 29, 2012

Corporate Japan's Craving For Indian Assets


(Click on the image for a larger view)

Note: The above data from the Venture Intelligence M&A Deal database includes only majority control transactions and does not include minority investments like Nippon Life's 26% stake acquisitions in Reliance Life and Reliance Mutual Fund.

From a recent Business Today article:

Arun Goyal, Minister (Economic and Commercial) at the Indian Embassy in Tokyo, says: "Today, 850 Japanese companies are active in India. There were only 200 around four years ago."

Small Japanese companies have woken up to India, too. Much of this interest in India is due to Japanese companies' disillusionment with China. Jun Hemmi, Executive Director of Edelweiss Tokio Life Insurance Company, who was the first CEO of Iffco Tokio General Insurance Company nearly a decade ago, says China is a challenge for Japanese companies. "We have not been best of friends," he says. "It's like an Indian company trying to sell retail products in Pakistan. India is where we want to be for growth." He adds India's regulatory regime is fairer than China's, and the state-owned Life Insurance Corporation of India will not have an unfair advantage over private insurers.

Hemmi says Tokio Marine, which manages large pension funds in Japan, would like to invest some of that money in India. The exchange rate is a worry, though. "In 2000, a rupee equalled three yen, but now it is less than 1.5 yen," he says. However, he adds that India, like any democracy, works at its own pace, and Japanese companies are fine with that.

Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

August 28, 2012

Gloom Amidst the Boom: Why Solar Panel Cos are Wilting

From a Business Today article:
Though more and more solar energy is being produced in India - installed capacity rising exponentially from just 20 megawatts (MW) in 2009 to 980 MW by April 2012 - domestic solar panel manufacturers are in the doldrums. Just a couple of years ago, they were riding high. But now they hardly get any orders. All those setting up solar power plants prefer to buy their equipment overseas, especially from China.

... India's solar mission does stipulate some domestic sourcing, but it makes a significant exception. Solar panels are of two kinds: those made of crystalline silicon, and those employing the more contemporary 'thin film' technology. The latter are not necessarily better - indeed globally, only 10 per cent of installed solar power capacity uses thin film. But the local sourcing restriction does not extend to thin films and almost all Indian solar power producers have plumped for it.

... Still, desperate situations often spark off ingenious solutions and local solar equipment makers too are fighting back, without waiting for the banks or the government to bail them out. Some are getting into solar power generation themselves - a vertical integration which guarantees that a part of their production always has a market. Moser Baer, for instance, set up two solar power plants last year which source 40 per cent of their panel requirements from Moser Baer's own manufacturing division.

Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

August 26, 2012

Deal Alert: Avendus Capital advises BookMyShow on Accel Partner’s USD 18 Mn investment

Bigtree Entertainment Pvt. Ltd., the holding company of India’s leading entertainment ticketing website BookMyShow.com, announced an investment by Accel Partners, one of the leading global investors in Internet businesses. As a part of this transaction, Accel will invest USD 18 Mn through a primary infusion of capital and secondary sale of shares from existing investors.

Avendus Capital was the sole financial advisor for this transaction. 

On signing the deal, Mr. Ashish Hemrajani, Founder & CEO of BookMyShow said, “The funding from Accel comes at an interesting inflection point in our journey and is a strong vindication of our efforts to create India’s leading online entertainment ticketing platform. We look forward to leveraging Accel’s global Internet experience and Network18’s continued support to expand our footprint and help take our customer experience to the next level.” 

Commenting on the transaction, Mr. Aashish Bhinde, Executive Director (Digital Media & Technology) at Avendus said, “This transaction marks the coming together of one of the best teams in the consumer Internet industry with one of the most experienced investors in the space. I am confident this combination will enable BookMyShow to become the default entertainment destination for consumers in India.” 

Mr. Prashanth Prakash, Partner of Accel India said, “BookMyShow caught our attention because it has become synonymous with online entertainment and ticketing. We are constantly striving to invest in businesses that assume a leadership position by driving the definition and growth of their respective categories. We are very excited to add one of India’s pre-eminent Internet brands to our portfolio of investments in India.” 

Mr. Sameer Gandhi, Partner of Accel US further commented, “The Internet is playing a crucial role in bringing goods and services to the masses in India and will produce the next generation of Indian consumer franchises. BookMyShow has demonstrated exemplary execution in creating a large online community, and in our view, has the potential to become the preeminent entertainment destination for India. We look forward to playing our part in helping the company realize that vision.”

Commenting on the transaction, Mr. Sarbvir Singh, Head - Investments of Network18 said, “In partnership, with the BookMyShow team, we have created a premier asset in the digital commerce space and built value for all stakeholders. We believe that Accel’s global Internet experience combined with the passion of the BookMyShow team will help the company take customer experience to the next level while continuing to build on its market leadership. The transaction has allowed us at Network18 to profitably monetize a part of our investment while allowing us to maintain a large position in the company to participate in the next phase of BookMyShow’s journey.” 

About BookMyShow.com 

BookMyShow.com is the largest entertainment ticketing portal in India with over 90% market share in the online entertainment ticketing space. Headquartered in Mumbai, BookMyShow.com also has offices in New Zealand and Malaysia. BookMyShow.com has an enviable kitty of over 1300 screens spanning across 250 cinemas in more than 100 cities. BookMyShow.com tickets for over 500 events every year across India. In the arena of Sports, 75% of India's largest sporting events are managed by BookMyShow.com. Some of them include Formula 1, Indian Premier League, Indian Cricket League, Aircel Chennai Open, Super Fight League, Yonex Badminton Championships, etc. With over 33 million page views per month, BookMyShow.com has an active and loyal database of over 3million happy consumers. It has a fan following of over 1.3 million Facebook and Twitter users. BookMyShow.com has special downloadable mobile applications for Blackberry, iPhone, Android and Windows phone. It has also been awarded in the category of 'The Hottest Company of the Year-2011-12’ and ‘The Company to Watch Out for' in the prestigious CNBC Young Turks Award. On an average, BookMyShow.com sells more than a million tickets per month. BookMyShow.com is one of the top three entertainment e-commerce websites in India. For more information, please visit www.bookmyshow.com 

About Accel Partners

Founded in 1983, Accel Partners has a long history of partnering with outstanding entrepreneurs and management teams to build world-class businesses. Accel today invests globally using dedicated teams and market-specific strategies for local geographies, with offices in Palo Alto, California, New York City, London and Bangalore, as well as in China via its partnership with IDG-Accel. Accel has helped entrepreneurs build over 300 successful companies, many of which have defined their categories, including 99designs, Actuate, AdMob, Agile Software, Alfresco, Angry Birds (Rovio), Atlassian, BBN, Bonobos, Braintree, Brightcove, Cloudera, ComScore, Diapers.com (Quidsi), Dropbox, Etsy, Facebook, Fusion-IO, Gameforge, GlamMedia, Groupon, Imperva, Infinera, Interwoven, IronPlanet, JBoss, Kayak,Lookout, Macromedia, metroPCS, MoPub, OPOWER, Polycom/PictureTel, Playfish, Portal Software, QlikTech, Rapt, Real Networks, Redback, Responsys, Riverbed, Spotify, Squarespace, SunRun, Trulia, UUNet, Veritas, Walmart.com, Webroot, Wonga, XenSource and Zimbra. In India, Accel has made investments in companies such as Ace Creative Learning, Babyoye, EduPristine, enStage, Flipkart, Forus, FreshDesk, HealthcareMagic, Mitra Biotech, MuSigma, Myntra, Perfint, Probe, PropTiger, QwikCilver, SherSingh, SureWaves, Trivone, Vinculum and Virident. For more information, please visit www.accel.com 

About Network18 Group 

The Network18 Group is a media and entertainment company with interests in television, internet, films, e-commerce, magazines, mobile content and allied businesses. Through its subsidiary ‘TV18 Broadcast Ltd.’ [BSE: 532800, NSE: TV18BRDCST], the group operates news channels - CNBC-TV18, CNBC Awaaz, CNBC-TV18 Prime HD, CNN-IBN, IBN7 and IBN-Lokmat (a Marathi regional news channel in partnership with the Lokmat group). TV18 also operates a joint venture with Viacom, called Viacom18, which houses a portfolio of popular entertainment channels – Colors, Colors HD,MTV, SONIC, Comedy Central, VH1 and Nick - and Viacom18 Motion Pictures, the group’s filmed entertainment business. TV18 and Viacom18 have also recently announced a strategic joint venture called IndiaCast, a multi-platform ‘content asset monetization’ entity mandated to drive domestic and international channel distribution, placement services and content syndication for the bouquet of channels from TV18,Viacom18 and other broadcasters. TV18 has also forayed into the Indian factual entertainment space through A+E Networks | TV18 (Joint venture between A+E Networks and TV18 Broadcast), which has recently launched a new channel – HistoryTV18. Through ‘Network18 Media & Investments Ltd.’ [BSE: 532798, NSE: Network18], the group operates its digital, publishing and e-commerce assets including moneycontrol.com, ibnlive.com, in.com and firstpost.com. ‘Network18’ also operates e-commerce properties like HomeShop18 and bookmyshow.com and publishes Forbes India, the nation's first local edition of a foreign news magazine title and one of the world’s most influential business brands, in collaboration with Forbes Media. In addition, through ‘Network18’, the group operates Newswire18, providing real time financial information and news terminal services, and Network18 Publishing, a player in the special interest publishing space as well as E18, the group’s event management venture and Sport18, its sports management and marketing venture. ‘Network18’ has investments in Yatra, DEN Networks and other Capital18 portfolio companies. For more information, please visit www.network18online.com 

About Avendus Capital Pvt. Ltd. 

Avendus Capital is a leading financial services firm which provides customised solutions in the areas of financial advisory, equity capital markets and wealth management. The firm relies on its extensive track record, in-depth domain understanding and knowledge of the economic and regulatory environment, to offer research based solutions to its clients that include institutional investors, corporates and high net worth families. Avendus Capital has consistently been ranked among the top-five corporate finance advisors in India and has emerged as the advisor of choice for cross-border M&A deals and has closed 40 cross-border transactions in the past 4 years. Avendus Securities through its Institutional Equities practice is able to offer clients best-in-class research-driven advice to help them take investment decisions, while Avendus PE Advisors manages funds raised from its investors by investing in public markets and private equity. Headquartered in Mumbai, the firm has offices in New Delhi and Bangalore. Avendus Capital, Inc (US) and Avendus Capital (UK) Pvt. Ltd. located in New York and London respectively, are wholly owned subsidiaries offering M&A and Private Equity syndication services to clients in the respective regions. For more information, please visit www.avendus.com

August 23, 2012

Deal Alert: AbsolutData Raises $20M from Fidelity Growth Partners India

From the Press Release: 

Fidelity Growth Partners India commits to a $20 million investment in AbsolutData, a leading provider of data analytics services to global organizations. With this round of investment, AbsolutData aims to scale up its global delivery footprint to meet the growing demand for advanced and big data analytics. 

AbsolutData is a pioneer in delivering analytics and research services through a global delivery model. The company today works with several marquee clients, including Fortune 1000 organizations across the globe, enhancing their advanced and big data analytics capabilities, and helping them gain real time insights to increase profitability and growth. Analytics is a top priority for CXOs across the world. However, there is a shortage of skilled data scientists to analyze the growing amounts of data. AbsolutData, with its deep industry expertise and strong analytical capabilities is well positioned to help its clients gain maximum value from their data assets. 

“We are delighted that a leading private equity firm like FGPI has invested in AbsolutData. Our vision is to become the most impactful and respected analytics firm in the world. We now serve some of the largest and most reputed retail, consumer goods, technology and hospitality companies, across US, Europe and Asia Pacific. This investment will enable us to further strengthen our ability to service the increasing demand from our global clients.” said Dr. Anil Kaul, CEO, AbsolutData. 

As part of this transaction, Kabir Narang, Director at Fidelity Growth Partners India, joins the AbsolutData Board of Directors. Commenting on the investment, Kabir Narang said “We had prioritized business analytics as an investment theme. This sector will continue to benefit from the dramatic increase in volume of data generated by consumer devices such as smart phones and tablets and the increase in computing power and storage capacity in organizations. We are very excited to partner with AbsolutData as it embarks on its next phase of growth. The company has superb delivery capabilities and deep expertise in the attractive consumer and marketing analytics segment. The management team continues to invest in knowledge management and institutionalize processes that will help it scale rapidly.”

August 16, 2012

Deal Alert: Avendus Capital advises MAS Financial Services Ltd on raising growth capital from DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH

From the Press Release:

MAS Financial, a leading retail non-banking financial company (NBFC) in Gujarat, has raised growth capital from DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH. With over two decades of experience in doorstep financing, MAS caters to the specialised financial needs of MSME’s. It also provides loans for financing two wheelers, CVs and affordable housing. 

Commenting on the transaction Mr. Mukesh Gandhi, Promoter and Director Finance MAS Financial said, “Our in depth understanding of the local needs and repayment capabilities along with a robust network spread across six states, has helped us grow a sound portfolio. We are happy that DEG was able to see immense value in our business model and will work with us towards creating a national footprint.” 

Mr. Kaushal Aggarwal, Managing Director at Avendus Capital said, “NBFCs focusing on retail-MSME lending are one of the fastest growing sectors in the Indian financial services industry. MAS Financial is a leading NBFC in Gujarat and is expanding into other logical commercial hubs across India. With a sound business model, prudent capital raising, robust risk management strategy and flawless execution, it has all the constituents required to create a leadership position in the NBFC segment.” 

Avendus Capital was the exclusive financial advisor to MAS Financial Services Ltd for this transaction. 

About MAS Financial Services Ltd. 

MAS Financial is a leading retail Non Banking Finance company with presence across Gujarat, Maharashtra and Rajasthan, focusing on micro enterprises/MSME loans, two wheelers loans, commercial vehicle and affordable housing finance. 

For more information, please visit http://www.mas.co.in 

About DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH 

DEG, a subsidiary of KfW and one of Europe's largest development finance institutions, finances investments of private companies in developing and transition countries. DEG has been committed to private-sector investments in India since 1964. Drawing upon its many years of experience in India as well as in other developing countries, it provides valuable assistance to companies in realizing their investment projects. DEG invests in companies across the sectors that contribute to sustainable development of the economy. DEG’s India portfolio currently stands at over EUR 500 million spread across about 50 companies. 

DEG’s deal contact: 
Amit Goyal - amit.goyal@degindia.com 
For more information, please visit http://www.deginvest.de 

About Avendus Capital 

Avendus Capital is a leading financial services firm which provides customised solutions in the areas of financial advisory, equity capital markets and wealth management. The firm relies on its extensive track record, in-depth domain understanding and knowledge of the economic and regulatory environment, to offer research based solutions to its clients that include institutional investors, corporates and high net worth families. In recent years, Avendus Capital has consistently been ranked among the top-five corporate finance advisors in India and has emerged as the advisor of choice for cross-border M&A deals and has closed 40 cross-border transactions in the past 4 years. Avendus Securities through its Institutional Equities practice is able to offer best-in-class research-driven advice to help its clients take investment decisions, while Avendus PE Investment Advisors manages funds raised from its investors by investing in public markets and private equity. Headquartered in Mumbai, the firm has offices in New Delhi and Bangalore. Avendus Capital, Inc (US) and Avendus Capital (UK) Pvt. Ltd. located in New York and London respectively are wholly owned subsidiaries offering M&A and Private Equity syndication services to clients in the respective regions. 

For more information, please visit www.avendus.com

August 13, 2012

Deal Alert: Accel Partners invests 2.7 crores in Mind Edutainment

From the Press Release:

Accel Partners, a leading global venture capital firm and a group of angels led by Meena Ganesh (CEO & MD Pearson Education Services India) has announced its investment of INR 2.7 crores in a Delhi based education company Mind Edutainment Pvt. Ltd. (MEPL).

Mind Edutainment was created in the year 2007 with a focus to serve in the field of child development through cognitive thinking process. Sangeeta A. Khurana & Ashutosh Khurana pioneered the concept of HOTS (Higher Order Thinking Skills) development program in India with the use of physical Thinking Tools and Mind Games. The program created by them has been adopted by 40 plus schools and 50000 plus students of UKG to Grade VIII as a complete subject on thinking skills development. 

They have created India’s first of its kind ‘THOTS Lab’, a scientifically designed space in the school, with a purpose to equip the future generations with the wisdom of structured “Thinking Skills and Thinking Processes”. 

“This investment is part of our ongoing effort to invest in startups that aim to strengthen the education ecosystem in India. ‘THOTS Lab’ created by Mind Edutainment shall bring direct focus on Thinking Development within the school environment. The Lab cultivates originality of thought and promotes experiential learning to develop 250+ thinking and cognitive skills such as Problem Solving, Decision Making and Options Testing” said Mr. Anand Daniel from Accel Partners

Meena Ganesh, CEO and MD, Pearson Education Services India, said, “THOTS Lab initiative from Mind Edutainment is quite a revolutionary concept. Developing the thinking abilities amongst Primary and Middle years of education is indeed a radical need for the present day competitive environment. Thinking development coupled with the regular curriculum can make a potent combination for the best-of-breed education systems. And, with this investment, we are looking at providing a solution not to our country but to the other countries as well.” 

“The investment raised shall help the company to now scale the initial pilot project of THOTS Lab from 3 cities to 8 cities. With this funding, we shall be able to install THOTS Lab across Delhi, Dehradun, Chandigarh, Bangalore, Hyderabad, Chennai, Kochi & Pune. We shall also be using a part of this funding to integrate ICT in our delivery process to create an ideal mix of ICT and Experiential Learning. We are designing and developing HOTS development games (in physical and digital formats) to establish ourselves as one of the leaders in learning based games” said Mr. Ashutosh Khurana Co-Founder & CEO, Mind Edutainment Pvt. Ltd 

Mind Edutainment’s Thinking Development program was adjudged as the winner of the 'Power of Ideas' 2010 event in the education space. The event was organised by the Department of Science and Technology and the Economic Times in association with Indian Institute of Management Ahmedabad's (IIM-A) Centre for Innovation Incubation and Entrepreneurship (CIIE). It received a seed funding from DST, Govt. of India in 2010 which is being managed by CIIE IIM-A. 

About Accel 

Founded in 1983, Accel Partners has a long history of partnering with outstanding entrepreneurs and management teams to build world-class businesses. Accel today invests globally using dedicated teams and market-specific strategies for local geographies, with offices in Palo Alto, California, New York City, London and Bangalore, as well as in China via its partnership with IDG-Accel. 

Accel has helped entrepreneurs build over 300 successful companies, many of which have defined their categories, including 99designs, Actuate, AdMob, Agile Software, Alfresco, Angry Birds (Rovio), Atlassian, BBN, Bonobos, Braintree, Brightcove, Cloudera, ComScore, Diapers.com (Quidsi), Dropbox, Etsy, Facebook, Fusion-IO, Gameforge, GlamMedia, Groupon, Imperva, Infinera, Interwoven, IronPlanet, JBoss, Kayak,Lookout, Macromedia, metroPCS, MoPub, OPOWER, Polycom/PictureTel, Playfish, Portal Software, QlikTech, Rapt, Real Networks, Redback, Responsys, Riverbed, Spotify, Squarespace, SunRun, Trulia, UUNet, Veritas, Walmart.com, Webroot, Wonga, XenSource and Zimbra.

In India, Accel has made investments in companies such as Ace Creative Learning, Babyoye, EduPristine, enStage, Flipkart, Forus, FreshDesk, HealthcareMagic, Mitra Biotech, MuSigma, Myntra, Perfint, Probe, PropTiger, QwikCilver, SherSingh, SureWaves, Trivone, Vinculum and Virident.

August 10, 2012

Geothermal Cooling Startup GIBSS

Business Today has a profile of Mumbai-based start-up Green India Building Systems and Services (GIBSS) which uses geothermal technology to slash the power requirements of air conditioners.
In a conventional system, the cooling tower of an air conditioning plant sucks out the heat from an enclosed space, and ejects it into the environment. The technology GIBSS has designed uses instead a heat exchanger system to deflect the heat into the earth's crust. As the temperature just a few metres below the earth's surface is much lower than that of the air above, the energy transfer is more efficient, reducing power consumption.

...Equally challenging has been convincing customers. "Most companies didn't know what we were talking about," says Shenoy. The companies were also taken aback by the installation costs, which range from a few lakh rupees to a few crores, depending on the size of the establishment. "High upfront costs are the biggest roadblock," says Kumar of TERI. But Shenoy and Kaprekar have designed a payment model which seems to be working. "Since we assure clients they will save power right from the first month after installation, we tell them they can pay in equal monthly installments out of the money they save on power," says Shenoy. "They will be able to pay back the full amount in less than two years."

Investors have seen potential in GIBSS: investment firm Hyderabad Angels committed Rs 2 crore in February this year. "GIBSS has a multi-billion dollar opportunity before it," says Sashi Reddy, Founder and lead investor, Hyderabad Angels. Shenoy is reluctant to discuss financials, but says his company has been growing 200 per cent year-on-year. He is aiming at revenues of Rs 300 core by 2013/14.


Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

ReGen rides the wind

Business Today has an article on the Wind Energy sector with a special focus on the rise of ReGen Powertech (which is backed by PE investor Everstone and the Nuziveedu Seeds Group).
The Chennai-headquartered company's first project was a 50 MW wind farm in Karnataka's Chitradurga district, which was commissioned in September 2009. Since then, it has not looked back. In 2008/09, its first year of commercial operations, ReGen had modest revenues of about Rs 160 crore. That shot up to Rs 1,232 crore in 2010/11 and is projected to have crossed Rs 2,500 crore in 2011/12. "I've known the sector since I was 22," says the 48-year-old Khemka. His company's performance underlines just how well. In the last three years, Khemka has increased the firm's installation performance six times, revenues five times and profits 11 times. "Our order books are almost closed for this year," he says.

According to Indian Wind Turbine Manufacturers Association data for 2011/12, Tulsi Tanti's Suzlon Energy, in the industry for 16 years, remains No.1 with 1,180 MW of installed capacity. Yogesh Mehra's Enercon India is second, with 767 MW, while ReGen has risen to the third place with 416 MW. Gamesa Wind Turbines, the Indian arm of Spanish turbine maker Gamesa Corporacion Tecnologica, is fourth.

...To control costs, ReGen has been manufacturing turbines with more indigenous components. This, says Khemka, could save up to 35 per cent in costs.

Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

August 09, 2012

Deal Alert:UrbanLadder raises funding from IndoUsVenture Partners

From the Press Release:
Recently launched UrbanLadder.com, led by Ashish Goel, (ex –McKinsey, ex-COO of ACK Media); and Rajiv Srivatsa (ex-Yahoo) announced today that the company has raised $1 Million in funding. IndoUS Venture Partners has led the round from its recent fund.

The vision behind UrbanLadder.com is to provide Great Furniture, and Make it Easier for its customers. UrbanLadder.com offers a unique experience of buying furniture from a wide range of beautiful designs that are durable and dependable. Purchasing is made easy through easy payment options, door delivery and after-sales support. 

“The Indian consumer struggles to buy good quality, well-designed and well manufactured furniture at reasonable prices. We aim to deliver delight to the Indian consumer by setting global benchmarks for distinctive and deep product range, a memorable shopping experience online and forthright business practices”, said Ashish Goel.
The company will use the funds to strengthen the team, build the customer service infrastructure and invest in technology to give the consumer a distinctive experience. UrbanLadder.com has recently added Nikhil Ramaprakash as VP, Online Product, Kaustabh Chakraborty as VP, Operations and Shubha Hegde as VP, Marketing. 

”Home d├ęcor is a large and under-served opportunity. This large market requires solutions that offer customers value and requires affordable products with a convenient buying experience. The team at UrbanLadder has a highly differentiated approach and we are pleased to support them in building a leading brand that stands for quality furniture and convenient customer experience”, said Vani Kola, MD, IndoUS Venture Partners. 
Urbanladder.com currently offers an eclectic range in coffee tables, side tables, dining tables, balcony sets, book-racks, display units, wall racks and a host of other products. The next 2 months will see a slew of new product launches, including sofas and beds and other specialty furniture like easy chairs and bunk beds. Their exclusive range includes denim furniture and reclaimed furniture, which are available for the first time to the Indian market.

“We have an elegant and simple digital store-front, with deep product information. The category suffers from a lack of standardization in product specs and insufficient information availability, leading to core issues in the consumer purchase process and post-purchase dissonance. We are striving to deliver a much better, informed buying experience to our customers”, explained Rajiv Srivatsa. 

About IndoUS Venture Partners
 
IndoUS Venture Partners (IUVP) is a leading venture capital firm which provides early and mid-stage funding to new or growing businesses in India. The team comprises of experienced entrepreneurs and executives who understand the model of incubating ideas and transforming them into successful enterprises. IUVP invests in tomorrow’s business leaders, explosive new markets and enterprises that will transform our future. [Website: www.iuvp.com] 

To learn more,visit: www.Urbanladder.com

August 02, 2012

Small retailers enjoying VC-funded e-tail discounting

Businessworld has an amusing article on how small retailers are having a great time enjoying the (VC-funded) discounts offered by e-tailers.
Heavy discounts, offers on first-time registration, and cash-back vouchers floating on the web are pulling retailers, like Joshi, to shop online with the motive to resell. E-tailers, already marred by negative gross margins, are taking a further hit. Retailers buying online eat into e-tailers' margins and, despite offering huge discounts, these e-sellers do not get the loyal customer they have been looking to cater to.

...Electronics, with its thin margins, is the most adversely affected segment — though the fashion and apparel category, which has better margins, is not far behind. Industry sources believe that most e-tailers that sell a lot of electronics generate about 20-40 per cent of their sales from resellers. However, most electronics players claim it is less than 5 per cent. With companies such as Jabong, 99labels, Freecultr, Timtara, etc., offering discounts ranging from Rs 500 to Rs 4,500 to shoppers, retailers find it convenient to create multiple profiles to avail the discount. They also get the product shipped to their doorstep for free in 3-4 days and then sell them at significantly higher margins.

...Pulkit Sharma, an apparel retailer in Kurukshetra, buys 70 per cent of his goods online. Even after Yebhi diverted him to its wholesale portal, he still logs on to their website to avail promotional offers. "I order from various websites to avail the promotional coupons," says Sharma. He does not shy away from accepting that he has created multiple IDs in his family and friends' names. "Mujhe to apna store chalana hai madam (I have to run my store)," he says.


Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

August 01, 2012

Jain Irrigation's stumble and recovery

Bhavarlal H. Jain, Founder-Chairman of publicly listed Jain Irrigation provide an interesting first person account in Business Today.

Between 1992 and 1994 we acquired an IT company, took a granite quarry on lease, ventured into merchant banking and even bought an advertising agency. These diversifications happened along with forward/backward integration projects for our existing operations. By March 1997, we were trying to manage 11 different projects involving an investment of Rs 400 crore - almost equal to the company's size then. About Rs 250 crore was raised by way of debt.

...In early 2001, Aqua International Partners, a water-specific boutique fund, offered to invest in the company. There was a catch: we had to give the fund a controlling stake. We grappled with the unenviable question: who should survive, the promoter or the company? We decided to cede control, and in August 2002, the fund invested Rs 183 crore and took a 49.4 per cent stake in the company. The promoters' stake dropped from 73 per cent to less than 37 per cent and two family members had to vacate the Board.

We used the money to retire debt and bolster our working capital needs. We exited non-core businesses. By 2005, the company had revived and its share price was at Rs 160. The fund chose to exit. Today we are a Rs 3,800 crore company, the largest globally in mango processing and tissue culture, and second largest in drip irrigation. The share price is hovering around Rs 80 (on a face value of Rs 2 per share). Diversifying into unknown areas without required management bandwidth and eyeing disproportionate growth using debt is not sustainable. That was the lesson of a lifetime for me.

Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.