Technology

ShopClues.com an 'Indian unicorn' with $1.6b valuation

E-commerce start-up's new status follows fund-raising led by Singapore's GIC

NEW DELHI • Indian e-commerce start-up ShopClues.com raised funds in a new round that values the firm at more than US$1.1 billion (S$1.58 billion), propelling it into the growing ranks of Indian unicorns.

The Series E funding round is being led by Singaporean sovereign wealth fund GIC, while existing investors, including Tiger Global Management and Nexus Venture Partners participated, the firm said on Tuesday.

Start-up firms that reach a valuation of US$1 billion are referred to as unicorns.

ShopClues did not disclose the amount, but local media reports said the firm had raised as much as US$140 million, Reuters reported.

The start-up said it expects the funding will be the last round before it becomes profitable, ahead of an initial public offering next year.

  • QUEST TO RAISE FUNDS

  • US$140m What ShopClues raised, according to local media reports

    US$3.5b What Flipkart Internet, the biggest e-commerce giant in India, has raised

    US$1.5b Amount raised by Jasper Infotech's Snapdeal

The funds will be spent on advertising and improving technology as the firm plans to reach profitability before the planned IPO, said ShopClues chief executive Sanjay Sethi.

The latest round of funding more than doubles what ShopClues has received so far, but is dwarfed by the billions of dollars raised by rivals Flipkart Internet and Jasper Infotech's Snapdeal, The Wall Street Journal reported.

Flipkart, the biggest e-commerce giant in India, has raised nearly US$3.5 billion and Snapdeal has raised US$1.5 billion.

The e-commerce market in India is expected to grow to US$220 billion in the value of goods sold by 2025, up from an expected US$11 billion last year, Bank of America Merrill Lynch said in a recent report.

ShopClues, founded in 2011, is targeting profitability in the first half of next year. The company's gross merchandise volumes, or the value of all the goods sold on its website, is currently on track to hit US$750 million this year.

The firm sells mostly low-cost items like fly swatters and US$3 saris in smaller towns and villages, while Flipkart and Snapdeal make most of their money selling smartphones and other electronic devices.

With most e-commerce firms losing money on almost every transaction as a result of discounts, start-ups like ShopClues are finding it harder to raise new rounds of funding unless they show profitability. Investors are now asking to see data on how efficiently companies spend cash, Mr Sethi said, reported WSJ.

ShopClues said its billion-dollar valuation is conservative for a technology start-up, and is designed to facilitate a successful public offering.

A version of this article appeared in the print edition of The Straits Times on January 14, 2016, with the headline 'ShopClues.com an 'Indian unicorn' with $1.6b valuation'. Print Edition | Subscribe