Upswing in e-commerce attracts more investors in India

Attracted by immense growth potential and high-margin business model, venture capital (VC) and private equity (PE) players are sensing a serious business in the e-commerce in India. Warburg Pincus Llc, a private equity (PE) firm with $30 billion in assets under management, which has invested in companies such as Bharti Airtel Ltd, Housing Development Finance Corp. Ltd and Kotak Mahindra Bank Ltd, calls itself a lifecycle investor and is also eyeing the fast growing e-commerce sector in India.

“We would like to invest as the company continues to grow and needs more capital and we are ready to invest at a higher valuation as it grows. E-commerce and Internet companies are growing extremely fast in India and penetration is really low,” said Vishal Mahadevia, managing director, Warburg Pincus.

With rising internet penetration and new modes of payment such as cash-on-delivery, the country’s online retail industry, growing at 35% year on year, is expected to touch Rs 7,000 crore by 2015 from R2, 000 crore at present, according to a report by industry body Assocham.

In the last few months, online fashion retail businesses have witnessed more than half a dozen investments from major VC/PE players.

 

Company Amount
(in $ million)
Investors 
Myntra.com 18 Accel India, Tiger Capital, IDG Ventures
Naaptol.com 7 Canaan Partners
Fashionandyou.com 40 Norwest Venture Partners and Intel Capital, Sequoia Capital India and Nokia Growth partner
Letsbuy.com 6 Helion Ventures, Accel India, Tiger Global
Bigshoebazaar.com 2 Nexus Venture
Caratlane.com 6 Tiger Capital
Babyoye.com 3 Accel India, Tiger Global
Jasperinfotech.com 12 Nexus Ventures, Indo-US Ventures
Firstcry.com 4 SAIF
Indiaplaza.com 5 Indo-US venture
Flipkart.com 20 Tiger Capital
eShakti.com 3 IDG Ventures
Lenskart.com 4 IDG Ventures
Zovi.com 5.5 SAIF Partners and angel investor, MakeMyTrip founder Deep Kalra
Caratlane.com 6 Tiger Global
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“The India market is also growing rapidly. We have plans for India market in the next quarter. eShakti is growing at 100% annually. And it may be extended in near future,” says T C Meenakshisundaram, managing director, IDG Ventures India.

The recent developments in e- commerce, right from merger and acquisition and private equity fundraising to the key trends advocate the sector has evolved.  Recently, Flipkart raised $200 million in a PE round of funding from the General Atlantic Partners, in line with its target of Rs 500 crore, to be achieved by March, 2012. The e-commerce in India has evolved over the past decade in terms of magnitude when the market size was Rs 81.46 billion. And now the total net commerce market of India is expected to grow to Rs.465.20 billion by December 2011.

 

 

PE/VC Investments In E Commerce For The Following Period

Period

No. Of Investments

Amount (US$M)

2011 YTD

37

305

2010 ( Jan – Dec)

12

55

2009 ( Jan – Dec)

12

45

2008 ( Jan – Dec)

15

114

2007 ( Jan – Dec)

10

43

Source: Venture Intelligence

 

Top PE/VC Investments In E Commerce For 2011 YTD

Company

Investors

Amount (US$M)

Date

Yatra Online  Intel Capital, Norwest, Valiant Capital

45

Apr-11

Fashion and You  Sequoia Capital India, Intel Capital, Norwest, Nokia Growth Partners

40

Nov-11

Jasper Infotech  IndoUS Ventures, Nexus Ventures, Bessemer

40

Jul-11

Naaptol.com  NEA, Canaan Partners, SVB

25

Aug-11

Flipkart  Tiger Global

20

Jun-11

Source: Venture Intelligence

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  • Viral Chopra

    nice!