India's ShopClues to merge with Singapore-based Qoo10
Indian e-commerce company ShopClues has agreed a merger with Singaporean counterpart Qoo10 at a valuation reportedly 99% lower than its peak level of $1.1 billion.
The deal values ShopClues in a range of $50-80 million, according to TechCrunch. The company achieved unicorn status in 2016 when GIC Private led an approximately $150 million growth round that also included Tiger Global Management and Nexus Venture Partners.
Subsequent funding efforts have revealed a struggle to convince investors that a high cash-burn growth model was developing as planned. Innoven Capital India provided $7.8 million in 2017, while Unilazer Ventures and GIC added a combined $17 million across two investments during 2018, according to AVCJ Research.
ShopClues was founded in 2011 by Sandeep Aggarwal, his wife Radhika Aggarwal, and ex-eBay executive Sanjay Sethi amid fierce competition from Amazon India, Flipkart, and Snapdeal. The company was the subject of a string of controversies, including Sandeep Aggarwal being arrested in 2013 on charges of insider trading at a previous job, a legal dispute over voting rights between the founders, and the company being accused of selling counterfeit products under the L'Oreal label in 2018.
The Gurgaon-based company aims to differentiate itself by targeting India's tier-two and tier-three markets in favor of the major cities. It claims to have more than 100 million monthly visitors on a website hosting some 500,000 merchants in categories such as apparel, electronics, homewares, automotive, toys, and baby care. Merchant services include access to advertising and branding tools, payment facilities, and artificial intelligence-enabled data analytics.
The all-stock merger with Qoo10 is not expected to involve any organizational changes between the two companies, although the enlarged entity is hoped to benefit from operational synergies across its South and Southeast Asian footprints. It comes four months after the Qoo10's logistics unit raised $50 million from Korean private equity firm Crescendo Equity Partners. Previous investors in Qoo10 include eBay, Singapore Press Holdings, and US investors Saban Capital Group and Oak Investment Partners.
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