Reliance buys majority stake in India's NowFloats

Investors in NowFloats include IIFL Iron Pillar, and Omidyar Network, all of which re-upped in a $3.5 million round in March alongside Wenlyn Global Group. Previous backers also include BlackSoil Capital, Blume Ventures, Hyderabad Angels, Mumbai Angels Network, and Microsoft Accelerator Bangalore. The company has raised about $17 million since 2017.

Reliance intends to increase its holding to 89.7% by investing an additional INR750 million by December 2020 subject to agreed milestones. The conglomerate, which operates across a range of industrial, consumer and technology services segments, said in a release that the investment would “further enable the group’s digital and new commerce initiatives.”

Founded in 2012, NowFloats helps small to medium-sized enterprises (SME) build out their online presence through search engine optimization (SEO) and website maintenance services. The company claims its method of automated SEO achieves better results than conventional approaches since it emphasizes customer engagement rather than simply relying on data from traditional advertising platforms.

NowFloats, which estimates its target market encompasses 53 million businesses, is said to have served more than 300,000 retails partners to date. It targets SMEs through a brand called Boost which currently has about 35,000 customers, while large enterprises are targeted with a platform called Kitsune. Revenue increased 74% during the 2019 financial year to INR325.6 million, while the net loss narrowed from INR474.9 million to INR432.4 million.

Indian exit activity is expected to accelerate in the near term, with a build-up in PE and VC funding in recent years adding pressure to a stagnant local IPO market. This is expected to be realized through a boom in secondaries transactions, LP pressure to realize value from a growing field of high-performing technology players, and increased strategic M&A, especially in areas such as financial technology, where global corporates are playing a bigger role locally.

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