TVC Skyshop raises additional INR 10 Cr from Morpheus Fund; expands to the Middle East

Tvcskyshop (1)Private equity firm Morpheus fund, which had invested INR 42 Cr in the multi-channel virtual retailer, TVC Skyshop in August for a stake of 8%, had recently invested additional INR 10 Cr in the company, with this investment TVC Skyshop is now valued at INR 500 Cr.

As per reports, the investment was made in October.

TVC Skyshop has no plans to raise any further funding, unless it plans for an acquisition, which is unlikely in the near future.

With the funding TVC SkyShop has also expanded its footprints in the Middle East region.

The company is currently running a pilot project i.e. “ A very low cost and risk operations” before making any sort of serious investments in the region, but as per the company it has received a positive response.

“It is difficult to estimate demand in a new region because every country has its own culture and market environment. This is a pilot foray and if it works well we will expand further.. Though in terms of population the region is very small but given its high per capita income, in terms of potential it could be extremely big,” said Raj Halve, Operating Partner at Samara Capital. Samara Capital had invested in TVC Skyshop in 2007 and holds a 22% stake in the company.

Less expenditures incurred on delivery, high penetration and usage of credit cards are the major reasons which influenced company’s decision to expand in the Middle East region.

TVC Skyshop is already getting a positive response in the region, but another company with a  similar model i.e. Homeshop18 which had recently raised USD 14 Mn in funding led by existing investors Korean home shopping major, GS Home Shopping (GS), OCP Asia Ltd (OCP Asia) and Network18, believes that an overseas expansion may not be financially viable for an Indian virtual retailer.

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“Selling abroad requires a deep domain understanding because demands of consumers overseas are very different from those in India. It’s a niche segment as the designs and requirements of foreign buyers are different, the trends in those countries are different and even the regulatory challenges are different,” said, Narasimha Jayakumar, COO and business head, eCommerce at Homeshop18

TVC Skyshop was launched in 2000 by Vinod Agarwal, it is a multi-channel direct to consumer virtual retailer, selling products through various platforms including print media, direct response television, eTailing website and catalogue. Currently TVC Skyshop has more than 50 lakh customers and had reported a revenue of INR 69 Cr for January-March 2013, which is up by 80% Y-o-Y.

Iamwire Take

In recent times, there are a lot of companies expanding to the Middle East, including the ones in tech, retail, services and other sectors. Iamwire believes that the Middle East provides an easy extension of Indian businesses providing a relative larger potential, being a matured online demand. In this trend, it shall be interesting to see how well these companies do in new geography and who all continue with their expansion spree.

What’s your view? Should Indian eTailers look for international expansion opportunities?

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