Clues Network Pvt Ltd, the startup that runs the horizontal e-commerce marketplace ShopClues.com,has raised Series B funding of $10 million (Rs 54.1 crore) from Helion Venture Partners, Nexus Partners and Netprice.com, a Japanese business group based in Tokyo. Helion led the round and as part of the investment, its managing director Sanjeev Aggarwal has joined the board of ShopClues.
"The funds will be used to scale our business further, increase our product catalogue and expand the reach of our fulfilment network. A part of it will be also used to strengthen the technology platform of ShopClues," said Sandeep Aggarwal, co-founder and CEO of ShopClues.
Also, this is the second investment by Nexus in the company. In January 2012, Nexus led the $4 million Series A round in ShopClues, which also saw the participation of an unnamed Asia-based VC investor. As part of the investment, Anup Gupta, MD of Nexus Venture Partners, joined the board at that time. However, ShopClues did not disclose the names of its investors last year. The company also secured angel funding to the tune of $2 million from a few US-based investors in August 2011.
"We are delighted to continue our partnership with Shopclues. We are now holding a high minority stake in the company" said Gupta. He also mentioned that the VC firm did more than its pro-rata share in the Series B round.
The Gurgaon-based startup was founded by Sandeep Aggarwal and Sanjay Sethi (vice-president, products) in July 2011. The company was initially bootstrapped with Rs 1 crore, which was personally invested by Sandeep.
ShopClues works on a zero-inventory marketplace model where sellers can display their product catalogues. Besides helping merchants reach out to a larger customer base, ShopClues also claims to increase their (merchants) business by providing a number of business management tools and marketing & decision-enabling analytics. As of now, it claims to offer over 2 lakh products and is shipping to more than 7,500 locations.
As of September last year, the company was recording around 2,500 transactions a day with an average ticket size of Rs 900. It was also targeting Rs 100 crore in gross sales by December 2012 and was planning to set up at least seven fulfilment centres (the company had only two till then).
At that time, Sandeep Aggarwal said, "We have a very long-term plan for our company and going by this rate, we might become the first e-commerce company to become profitable. ShopClues would turn profitable by Q4 2013."
Prior to setting up ShopClues, Sandeep was a senior internet and software analyst at Caris & Company, a San Francisco-based, research-driven boutique investment bank. He had also worked with companies like Collins Stewart, Oppenheimer & Co., Citigroup Investment Research, Microsoft Corp, Charles Schwab and Kotak Securities. Aggarwal holds an MBA degree from Olin Business School at Washington University in St. Louis.
Sethi was earlier the head of global product management at eBay and also worked with companies like TradeBeam and Steel Authority of India. An IIT-Delhi alumnus, he also holds a B.Tech degree in Mechanical Engineering from Indian Institute of Technology (Banaras Hindu University), Varanasi.
Other online marketplaces
BuyThePrice.com, an e-commerce site owned and operated by Hyderabad-based MyZingo eCommerce Service Pvt Ltd, also did a Snapdeal and completely changed its business model â€“ from a pure e-commerce site to a 100 per cent marketplace.
And most recently, Ahmedabad-based e-commerce firm Infibeam.com quietly pivoted from a pure-play e-commerce site to a hybrid venture (via a controlled marketplace), which means apart from selling products on its own, it will also allow other vendors to sell the same product with same or different pricing.
(Edited by Sanghamitra Mandal)