Online Retail in India

by Deepak Sharma on Monday, June 04, 2007

Got to read about Futurebazaar.com plan to sell some stake to private equity funds Sequoia and Carlyle. Futurebazaar.com is 100% owned by Pantaloon Retail (Kishore Biyani) and it is reportedly selling 10-15% to Sequoia and Carlyle.

Kishore Biyani may be just a mouse click away from raising big money for his online shopping portal.
His business of the future, Futurebazaar.com is in talks to rope in private equity funds Sequoia and Carlyle.
Sources have told NDTV that Pantaloon retail, which owns 100 per cent in Futurebazaar.com will sell 10 –15 per cent stake in the portal.
The valuation for the portal has been pegged between Rs 700 – 800 crore and Biyani is likely to raise Rs 80- 120 crore through stake sale.
While the company management is tightlipped about the private placement in Future Bazaar, Biyani had earlier told NDTV that the group has lined up big fund raising plans.
"We are at various stages of fund raising and have completed QIP placements and we are looking at various other opportunities as we go along," said Kishore Biyani, CEO, Future Group.
Futurebazaar.com that was started a year back, does business of about Rs 10,00,000 per day, getting around 3,50,000 hits daily.

Now interesting part of this news is, while the web site makes only Rs 1 Million (~USD 25000) per day (~ USD 9 Million per year), the valuations look highly stretched (Rs 700 - 800 crore). They are talking of stake sale of around USD 20-30 Million which again looks stretched. E-Commerce has really not picked up in India and may take another 3-4 years to reach a critical mass but there is good interest by private equity funds like Sequoia according to the same article has already invested in online portal like Indiatimes.com, Travelguru.com, shaadi.com and Mauj.com. I guess these PEF's are seeing something that I can't.

6 comments

Well the FutureBazaar is the only one right now which is doing good in online retail. And you are right, Sequioa has invested in lot of other online portals and just trying to get hold on overall indian online business. so may be its playing a dart game here. Who knows, it might get lucky.

by Information Madness on 11:25 AM. #

Online portals are becomming popular in india. so the retailers have started investing on such portals which is giving a good platform for the retailers to reach customers and sell their products.I have found one online portal in bangalore which is doing really good named storrz.com where we can shop groceries online.I think they are the only online shopping portal which allows customers to buy groceries online.

by sarath on 3:08 AM. #

hello sarath,
Its true that Online portals are becomming popular in India!! I ordered CookieMan cookies from storrz.com yesterday and got it today morning... I just love their service... Especially their SodexHo food coupon payment mode... :) Did you buy anything from there??

by Josh on 6:20 AM. #

Los Angeles private equity and hedge fund borrowing are the main things propping up the stock market these days. That won't last forever, but for now it's hiding the real economic damage that is being done.The tax issue is valid, and something most people can understand, but the real tragedy of the current situation is much more complex.

by ilanit on 2:12 AM. #

Futurebazaar.com sells useless brands of electronics (taiwan/chinese) made, in addition to Tier-1 who attracts buyers but doesnt give them long-term value of moeny. Try their video CD section there are hardly DVDs, VCD at Re.1 which are all unsold inventory of music companies....its all trash there....Try picking a book and you will not find it. The valuation is substantialy hyped. While conceptually this is a good business Sequioa Capital and the likes should run accurate valuation. The current investment in FutureBazaar.com cant be more than 10 crores, including the IT and supply chain infrastructure. With foriegn companies like Alibaba and ebay already facilitating low-end products, some indian company should create REAL value for people and not for the investors.

by Anonymous on 4:03 AM. #

Great stuff...Ive started an online store celebwears.com

Its doing great...but I feel its the concept and the demand for something unique.

I wish our government supported and made life a little easy for online business

by Vatsl on 4:45 AM. #