Babyoye.com Raises $2.5M From Accel, Tiger Global

Babyoye.com, an online shop for new parents, has received its first round of investment to the tune of $2.5 million from Accel Partners and Tiger Global. Accel led the round while Tiger Global, which had also invested in lifestyle and accessories site Myntra.com and consumer electronics shop Letsbuy.com, participated. The deal was closed 10 days ago.

We had reported earlier that the company was looking to raise $1-2 million to fuel its expansion plans. Here is more on our start-up profile -  Babyoye.com Starts Expanding; Why A Diapers.com Will Not Work In India.

The investment is into Mom Supplies Pvt Ltd, the technology partner and supply chain of Babyoye.com. Founded in May, 2010, Babyoye.com is run by Arunima Singhdeo and Sanjay Nadkarni.

On the funding, Nadkarni said, "We wanted to take the next step in terms of growth and scaling, and we will be investing significantly in warehouses and technology."

Babyoye currently runs two small, self-managed warehouses in Delhi and Mumbai. Now, it will invest in a professionally run warehouse space in Mumbai, followed by more warehouses in Delhi, Bangalore, Hyderabad and Pune over the next 12 months. It is also tying up with a large retail provider to increase its capacity.

Technology will also be shifted in-house. Right now, Babyoye outsources it to a Bangalore-based company, but it is now planning to take up more ownership. "We wanted to build competency and chose to move some of the execution in-house. This will also increase our flexibility," said Nadkarni.

Singhdeo said that Babyoye.com had reached a high of 300 orders per day last month, but had to backtrack in order to put in processes in place. The company said that now it would be investing in ERP to meet consumer expectations.