World Cup fever helps online retail firm raise $14 mn in PE

Rising demand for cricketing merchandise has helped online retail company Myntra.com raise private equity capital of $14 million to expand its range of sporting apparel. 

Global PE firm Tiger Global is the lead investor alongside existing investors IDG Ventures and Indo-US Venture Partners in this second round of funding for the firm founded by a team of three IIT-ians. 

Set up as an online portal for personalised gifts, Myntra now sells a range of jerseys and other merchandise such as T-shirts and mugs in Indian Cricket Colours from a range of international brands such as Nike, Reebok, Adidas and Puma. 

"With the cricket world cup going on, we are selling 500 jerseys per day," said Mukesh Bansal, CEO, Myntra.com who worked with a host of start-ups in Silicon Valley in the US before relocating back to India in 2007. He set up Myntra along with former IIT-Kanpur batch mates Ashutosh Lawania and Vineet Saxena . 

"Earlier we were into selling personalised goods which is a more seasonal business but now the focus is on retailing sporting lifestyle goods," says Bansal who has seen business grow nearly ten-fold since the company began hawking popular merchandise from the Indian cricketing league IPL. Social media marketing has proved to be a huge draw for the online retailer that now has over 470,950 fans on social networking website Facebook . 

"We think that social media platform is going to be the next big opportunity which is going to drive e-commerce. We see it is growing rapidly from past several months," said Mukul Singhal, senior associate at SAIF Partners , a global PE firm that recently closed a $3.5-million investment in another e-commerce retailer InkFruit. 

For Myntra.com the steep upsurge in consumer traffic since it added on sporting merchandise has been a crucial factor in attracting investor attention. In 2008, a year after its launch, Myntra raised $5 million from a consortium of investors, including IDG, NEA-IUV and Accel Partners . 

This helped the firm broaden its retail footprint by building a presence in retail malls and exclusive stores for sporting brands within large corporate campuses that works as a multiplier for the online retail business. 

Such a hybrid model that combines the online and offline sales is finding favour with investors as well. SAIF Partners' Singhal said one of the key attributes that drove the fund's investment in apparel - retailer Inkfruit was that the firm does some 25,000 transactions per month by using a combined model. 

"There is an increasing propensity for consumers to shop for everything online. As a result various categories such as apparels, electronics, books are opening up as big opportunities," says Kunal Bahl , chief executive at Jasper Infotech, the owner of on-line retail firm Snapdeal.com .

Source:- Economics Times