Another Flipkart backer bets on ShopClues as GIC leads Series E round

Horizontal e-commerce marketplace ShopClues has entered the exclusive club of 'unicorns', or startups with at least $1 billion valuation, after raising an undisclosed amount in a Series E funding round led by Singapore's sovereign wealth fund GIC Pvt Ltd.

Existing investors including Tiger Global Management and Nexus Venture Partners also participated in the round that values Shopclues at more than $1.1 billion, the company said in a statement.

Although the company did not disclose the amount raised, a Mint report estimates the investment to be around $110-140 million.

GIC and Tiger Global are major investors in Flipkart, India's largest e-commerce platform. GIC participated in Flipkart's $1 billion (around Rs 6,000 crore then) fundraise in 2014, co-led by Tiger Global and Naspers. GIC's investment in the two Indian e-tailers is interesting also because Temasek, Singapore's other state investment arm, has backed Flipkart's main local rival Snapdeal. This means GIC and Temasek between them own a piece of India's top three homegrown e-commerce firms.

ShopClues is run by Gurgaon-based Clues Network Pvt Ltd, the Indian unit of US-based Clues Network Inc. It will use the money raised to focus on building and rolling out new products to enable small and medium-sized merchants to digitize their business and to entrench itself as the e-commerce system operating on the cloud, the company said.

"This investment will enable us to double our focus on digitizing our merchants' businesses so that they scale to fully leverage the opportunity online commerce provides them," said Sanjay Sethi, CEO and co-founder.

Ravi Balasubramanian, GIC's head of Asia equities research, said ShopClues' "merchant-first mindset and solid management team" will enable the company to expand its reach, especially in smaller cities and towns.

Origin and growth

ShopClues claims its gross merchandise value, or the total value of goods sold, has quadrupled since January 2015. It says that, with about 3.5 lakh registered SME merchants on its platform, it ships almost 3.5 million products a month. The company expects to be profitable by the first half of 2017.

The startup was founded by former Wall Street tech analyst Sandeep Aggarwal and former eBay executive Sanjay Sethi in July 2011.

Prior to setting up ShopClues, Aggarwal was a senior internet and software analyst at Caris & Company, a San Francisco-based boutique investment bank. He had also worked with companies like Collins Stewart, Oppenheimer & Co., Citigroup Investment Research, Microsoft Corp, Charles Schwab and Kotak Securities.

Sethi was earlier the head of global product management at eBay and also worked with companies like TradeBeam and Steel Authority of India Ltd. An IIT-Delhi alumnus, he also holds a B.Tech degree in mechanical engineering from Indian Institute of Technology (Banaras Hindu University), Varanasi.

However, Aggarwal quit his executive role at ShopClues following an insider trading controversy and Sethi became CEO. Aggarwal's wife, Radhika Ghai Aggarwal, has taken over a more direct role. She is handling marketing at the firm and is listed as a co-founder now.

Unicorn tag

Last year, Shopclues raised $100 million (Rs 620 crore) in Series D funding led by Tiger Global. The company was valued around $450-500 million then. It had previously secured money from Helion Venture Partners, Nexus Partners and Beenos (formerly Netprice, a Japanese incubation-cum-investment group).

It raised an undisclosed amount—which is believed to be around $15-20 million—in Series C in April-May 2014 from Nexus and Helion. Earlier, it scooped $10 million in a Series B round in March 2013 and raised around $5 million in Series A.

The latest deal propels ShopClues into the club of unicorns where it joins Flipkart, Snapdeal and Paytm in the e-commerce segment in India.

Flipkart recently raised $700 million (Rs 4,625 crore now) at a valuation of $15.2 billion from a clutch of existing and new investors.

Snapdeal had raised $500 million (Rs 3,250 crore) in fresh funding led by iPhone contract manufacturer Foxconn, Chinese e-commerce giant Alibaba and existing investor SoftBank in August last year.

In September, One97 Communications Ltd, which runs mobile wallet and e-commerce venture Paytm, had raised an undisclosed amount in a fresh round of funding from NYSE-listed Alibaba Group Holding Ltd and existing investor Ant Financial.

Cab-hailing firm Ola, ad-tech firm InMobi and food-tech venture Zomato are among the other unicorns in India.