Premji Invest leads $50m round for India fashion site Myntra
Bangalore-based fashion portal Myntra Designs has raised $50 million from investors led by Premji Invest, an investment arm owned by Indian tycoon Azim Premji.
The funding will help the company scale up its business, attract and retain employees, ramp up its technology infrastructure and strengthen the Myntra brand, according to Mukesh Bansal, the company's co-founder and CEO.
"We are confident of achieving $1 billion gross merchandise value by 2016 and will be by far the largest fashion destination in India," he added.
The Economic Times reported that Myntra is seeking an additional $40 million from investors on top of the round just closed.
Myntra's online platform sells clothes, footwear and accessories. Since its launch in 2007, it has raised nearly $75 million from investors including Tiger Global Management, Accel Partners, IDG Ventures India, IndoUS Capital Advisors, Mumbai Angels and Erasmic Venture Funds, AVCJ Research shows.
Myntra's major rival in the online fashion retail space, Jabong, reecntly secured approximately $27.5 million from UK development finance institution CDC Group. The capital is part of a larger funding round that could reportedly reach $100 million.
Both Myntra and Jabong started out sourcing goods from suppliers and holding them as inventory and this remains a large part of their business. They have introduced inventory-light marketplace platforms, acting as a facilitator of transactions between suppliers and buyers, but not yet to the extent of broader e-commerce platforms like Flipkart and Snapdeal.
India's e-commerce sector is in the midst of consolidation, with larger players buying up or pushing out their smaller rivals. Of the 193 e-commerce sites that were operational in India in October 2012, 89 have either shut down or merged with other retailers, essentially wilting under pressure from high operating costs.
Myntra has been on the acquisition trail in the last year or so, picking up Fitiquette, a US-based platform that allows users to create an online body replica for trying on clothes, and Sher Singh, a private fashion label retailer run by Exclusively.in.
It was reported last month that Flipkart approached Myntra about a potential merger, encouraged by the common VC investors.
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