Gurgaon-based lifestyle and apparel e-commerce venture Freecultr was started as an online private label apparel retailer. Besides its own site, the firm also sells products under its brand through third party e-commerce properties and also has franchisee run offline stores. The firm also created a new business model under Freecultr Express, which is like a crowd-sourced t-shirt design and sales platform where Freecultr acts like a facilitator. The firm has built its business with barely $13 million in funding with the last round way back in 2012 from Sequoia and ru-Net. Techcircle.in spoke with Sandeep Singh, co-founder and CEO, Freecultr to understand the firm's plans. Edited excerpts:
Freecultr's last round of funding was almost three years ago. Did you get a bridge round in between? How have you sustained?
No, we didn't have the need for fresh funding or a bridge (funding) thus far. We took the decision to go omni channel for our brand. This strategy helped us bridge that gap and subsequently also proved to be a strong support system for us to keep our cash flows on the move. Now that we have a strong brand following, we are reinventing ourselves by democratising fashion and retail through a platform approach and are investing behind growing the same.
So are you looking to raise another round?
We are deploying various strategies to keep the momentum going from the early traction we have seen with our new platform. If raising another round of fund helps us do that, then we certainly will. We have been getting very good interest from the investor community ever since we launched our new platform.
Give us some idea about the new business model. How does it work? You give designs to outsourced manufacturers and them sell to consumers?
The specifics and back-end operations of our business are cards we will hold close to our chest. All we can say is that the designers on our platform have to just set up their stores and upload designs. We take care of production, operations and logistics. It's eventually proving to be a win-win for all stakeholders.
We understand you grew sales from around Rs 6.5 crore to Rs 9 crore between FY12 and FY13. How has been the growth in FY14 and then in the year ended March 31, 2015?
Revenues have tripled in the last 15 months. With the new platform getting launched officially in March 2015, which on its own is growing at a rapid pace, we are eyeing hyper growth in the coming financial year.
You had sunk deep into losses in FY13, over two times the sales. How have been the losses since then?
We have contained losses to a large extent and been on a path of responsible growth and profitability. Companies at our stage and business models need to invest early behind building brand and customer base. Once you develop a loyal following, you see these investments rationalising as you grow.
As for profits, our current pricing model (selling price - base cost = revenue) allows us to keep Rs 350/ behind each unit sold on the platform, which covers all our overheads and allows some profits too.
Take us through some basic transaction numbers.
We are shipping more than one lakh units a month from the platform and it's just the beginning.
What sort of GMV run rate you are working on as of now?
We are looking at touching Rs 100 crore GMV run rate pretty soon. Since we are building a platform for designers and buyers, we are also looking at growing our designer base to cross 3 lakh by 2016.
We understand that Freecultr products are sold on other e-commerce platforms? What's the strategy on that?
We currently retail through Snapdeal, Myntra, Jabong, Amazon, Flipkart etc. and a few more being assessed. At Freecultr Express, an ongoing goal for us is to maximize our designer's success rate and by that we mean more visibility that eventually will lead to more earnings. Channelling out clearly helps us bring that mission to life. While we are retailing on other channels, customer will always get the largest and most trending designs only on our platform as all designs don't get listed on these channels.
How is Freecultr Express different from a custom-design platform like FreshMonk?
Our business model and vision is quite different along with the experience our platform offers to both our designers and customers. There have been a few other platforms and clones that have sprung up over the past few months but none of them can really be compared to the simplicity our product creation tool offers, the speed with which one can start their own tee-store and the vision we have carved for the growth of our product. Designers can create and sell not just one design on a t-shirt but as many designs as they like across both men's and women's t-shirts with many more variants to be added soon. There is no restriction of minimum order per design or a long wait for reaching a tipping point to get the t-shirts into production. So all in all factoring our current user base (12000+ designers, 45000+ designs) and a high week-on-week growth rate, we can say we're off to a pretty good start with many more innovations on the way.