Reliance Industries’ retail arm, which has been in the news for raising about Rs 47,265 crore from global private equity players over recent months, has forayed into the online furniture space in India.
Reliance Retail (RRVL) on Saturday said it has acquired 96% equity share capital of Urban Ladder Home Décor Solutions for Rs 182.12 crore ($24.4 million at current exchange rates), in a cash transaction.
RRVL has a further option of acquiring the balance stake, taking its shareholding to 100% of the equity share capital of the Bengaluru based startup, it said in a stock exchange filing.
The retailer plans to make a further investment of up to Rs 75 crore by December 2023.
Since its inception, Urban Ladder has raised $110 million (Rs 819.38 crore according to current exchange rates) through a mix of equity and debt. Its investors include Ratan Tata, Steadview Capital, SAIF Partners, Kalaari Capital, and Sequoia Capital India.
“The aforesaid investment (acquisition) will further enable the group’s digital and new commerce initiatives and widen the bouquet of consumer products provided by the group, while enhancing user engagement and experience across its retail offerings,” Mukesh Ambani-led Reliance Industries, said.
Founded by Rajiv Srivatsa and Ashish Goel in 2012, Urban Ladder has grown to become a prominent omnichannel player in India.
It began as an online furniture marketplace and later pivoted into a single brand retailer after securing a licence as a single-brand retail firm after the government allowed 100% foreign direct investment in the segment.
Its most recent funding round took place in October, when it raised $2.1 million in a growth round from venture capital firm Sequoia Capital India, hedge fund Steadview Capital, and early stage investment firm SAIF Partners.
In October 2019, Srivatsa departed from the venture, at a crucial time for the company. In February of the same year, the company laid off about 60 employees as part of a strategy to cut costs and turn profitable.
The cost cuts were geared towards Urban Ladder’s goal of achieving profitability between April and June and staying the course before launching an initial public offering (IPO) in 2021, Goel had then told TechCircle.
In the financial year ended March 2018, Urban Ladder had reduced its operating losses by nearly three-fourths to Rs 118.66 crore. Total expenditure had declined by over half to Rs 232.73 crore amid a focus on reducing cash burn and offline expansion. In the financial year ended 2019, it reported its first ever bottom line gain, with a net profit of Rs 49.41 crore.
The company was last known to offer over 5,000 furniture designs under a dozen broad categories including living, bedroom, dining room, storage, study and decor.