Azim Premji, Chairman, Wipro, plans to enter the fast-growing Indian e-commerce sector, with USD 50 million funding in of India’s largest fashion e-tailer. Mr Premji’s investment fund – PremjiInvest has a corpus of more than USD 1 billion for private equity investments in listed as well as privately run growth companies. Co-investor in this latest round of funding, may also include the British investor CDC, valuing Myntra at around USD 250 million. Existing investors Accel Partners and Tiger Global, two US investors will also participate in the latest fund-raise.
Graduates from India’s premier engineering school, IIT, the founders Mukesh Bansal, Ashutosh Lawania and Vineet Saxena started Myntra in 2007 which has since changed its business model from being a portal offering personalised gifting options to a fashion-and-lifestyle retailer.
The fresh funding comes at a time when Flipkart, recently valued at USD 160 billion, has diversified into including fashion and lifestyle merchandise in its portfolio, thusputting pressure on specialised online rivals. The biggest bottleneck plaguing the Indian e-retail sector is that of an under developed back end infrastructure. While on-time delivery acts as a big differentiator in the Indian e-retail sector, this round of funding may help Myntra invest more into logistics and expansion.
In the past three years, the Indian e-commerce industry has witnessed almost 150 per cent growth, increasing from USD 3.8 billion in 2009 to USD 9.5 billion in 2012, a recent report jointly released by KPMG and IAMAI said.