Smile Group’s daily deal site has raised $17 million (Rs 84.11 crore) in its second round of funding that closed a few weeks ago. The investment was led by Mayfield Fund and Norwest Venture Partners, with Nokia Growth Partners and Intel Capital participating as well.

The fresh fund will be used by to rev up its focus on customers and also for technology and infrastructure development. On the technology front, the company will invest in mobility, ERP-CRM and Web-based technologies, as well as in IT infrastructure, which will improve customer service. It will also double its operational footprint from the current eight offices to 16 by June 2012.

Further details of the deal were not shared by the company, but according to Business Standard the stake sold is between 18 per cent and 20 per cent, which values the company at $85 million (Rs 420.58 crore).

According to comScore, is one of India’s top 10 e-commerce sites and it witnesses 1.3 million unique visitors per month. In June 2010, Germany-based Group Buying Global AG and the Smile Interactive Group acquired Gurgaon-based Wanamo Marketing Pvt Ltd that ran The site was then re-branded and launched in August 2010 as and raised $1.5 million from Group Buying Global AG. currently reaches 12 cities with local deals and also offers pan-India deals to users in more than 250 cities. The website has four million users and is adding 0.5 million members per month.

Gaurav Kachru, CEO of, said, “We have spent a lot of time and made a set of changes across the board, along with constant innovations, to build a sustainable model to scale up. Now, you will see those changes fructifying in the form of new products that we will roll out in the next few months.” He, however, declined to comment on the valuation.

Incidentally, all the four investors are making a new bet on the deal site. Harish Bahl, founder & chairman of the Smile Group, said, “Each of our investors is a great addition to our syndicate, and their backgrounds and experience will benefit our company as we enter our next phase of growth.” The Smile Group also runs the private sales site

Nokia Growth Partners is a global venture capital fund by the world’s largest handset maker. It manages $250 million and primarily invests in mobile companies. In July this year, it bought 3.51 per cent stake in Network 18 Media & Investments Ltd as part of a share-swap deal. Prior to that, it led an $8 million round of funding in classifieds site

Chip-maker Intel’s global investment arm has been much more active in striking small deals in India. Only recently, it has announced an investment of $20 million in six Indian companies.

Mayfield fund has invested in Tejas Networks and Consim Info (owner of while Norwest Venture Partners is a US-based venture capital firm that has invested in Komli Media, Quikr and Sulekha.

Market Scenario

The online deals segment is growing rapidly in India. Bangalore-based Flightraja Travels Pvt Ltd (Via) has recently launched a deals sub-site called Via Deals More. Other key deal sites in India are Rediff’s Deal Ho Jaye, Times Internet’s (Indiatimes),,, and Groupon India (, among others. Some of these raised funds at a corporate valuation of $200 million.

Niren Shah, managing director of NVP India, said, “Increased Internet penetration, combined with a younger tech-savvy population with a higher propensity to consume, is a tipping point for e-commerce in India. In particular, the online deals category is a large and rapidly growing model that has already proven to be highly attractive to merchants and consumers alike. As India trends to a more organised consumption market, we believe the merchant availability for online deals sites will only increase.”

Deal aggregator OfferGrid has just raised an undisclosed amount from MyFirstCheque. OfferGrid has an exchange where it aggregates deals from suppliers such as,, and, and allows publishers (websites, bloggers and mobile app developers) to monetise their traffic by showcasing these deals on their properties.

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