Homsehop18 looking to raise $50M in pre-IPO funding; appoints banker
TV18 Home Shopping Network Ltd, a teleshopping and e-commerce firm of the Network18 Group that runs operations under the Homeshop18 brand, is looking to raise $50 million in pre-IPO funding, sources told VCCircle. The pre-IPO fundraising would be closely watched as it would also provide a valuation hook for the firm at its proposed public issue at a time when PE and VC investors are becoming cautious about the e-commerce sector.
One source privy to the development said that the firm has appointed Citigroup as its banker for the transaction.
When contacted by VCCircle, HomeShop18 replied, “TV18 Home Shopping Network Holdings is a growing business and is continually assessing financing alternatives and the needs of its operations. We do not make these assessments public.”
An e-mail query sent to Citigroup did not elicit any response till the time of posting this article.
The proposed public issue would make SAIF Partners-backed HomeShop18 the first horizontal e-commerce firm in India to go public. At present, MakeMyTrip, an online travel agency, is listed in the US. Interestingly SAIF Partners is also an investor in MakeMyTrip.
HomeShop18 registered 134 per cent rise in revenue to Rs 30 crore during Q4 FY12 over the year-ago period. Sequentially, its revenues rose around 41 per cent, compared to Q3 FY12. For the full year ended March 31, 2012, HomeShop18 recorded revenues of Rs 89.6 crore, compared to Rs 71.4 crore in the previous year. But the pain point for the business lies in the fact that its net loss more than doubled to Rs 107.2 crore, compared to Rs 50.9 crore for the year ended March 31, 2011. This also implies that the loss of the company was more than its revenues.
SAIF was the first institutional investor in the company and it had provided the firm with startup capital back in 2006. In 2008, Capital 18 Fund, a private investment vehicle from Network18 Group, acquired 75 per cent stake in the company for $21 million, making it a 75:25 joint venture with SAIF. In the following year, GS Home Shopping Inc., along with Network18 Media & Investments Ltd, put $23.5 million into the company.
In April this year, news agency Reuters reported that Network18 was moving towards a US listing of HomeShop18 that could raise about $100 million. “We have ambitions to get listed and are open to it, but it is premature to talk about it now. We cannot give any timeframe on that at the moment,” Sundeep Malhotra, CEO of Home Shopping Venture, told the news agency at that time.
Last week, NextBigWhat reported quoting sources that the firm has filed its documents for “confidential” IPO at the NASDAQ.
(Edited by Sanghamitra Mandal)
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SAIF Partners is a private equity fund with $4 billion assets under the management. It provides early-stage and growth-stage capital to companies operating in Asia. The firm seeks to invest in consumer products and services, technology, media, education, telecom, financial services, healthcare, travel and tourism and manufacturing sectors with a focus on China, India, Korea, Hong Kong and Taiwan. It typically invests between $10 million and $100 million in one or more rounds of financing for a significant minority stake in its portfolio companies. The company was founded in 2001 and is based in Hong Kong, China with additional offices in Beijing and Shanghai.
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