Four-year-old general e-commerce firm Infibeam has hired global securities and investment banking group Jefferies to help raise private equity capital in its first round of external funding, the company’s founder Vishal Mehta has told VCCircle.
Mehta, founder and CEO of Ahmedabad-based Infibeam, said that the funds raised would be used for marketing to raise brand awareness, besides building the technology and scaling up the logistics of the firm.
He did not disclose the exact quantum, but said it would be in “tens of millions of dollars.” Earlier media reports had said Infibeam is looking to raise up to $50 million.
Talking about Jefferies, he said, “They are great advisors, having an appetite for large transactions and with a significant presence in Europe. Their international expertise will help us get a good funding.”
Although, several e-commerce firms have raised funds recently, investors are getting wary of the sector and this could make it challenging for Infibeam to raise capital. However, the firm has managed to scale up its business without any external funding till now, with its founder’s maximum skin in the game.
Till now, the entire capital invested in the company came from internal funding infused by Mehta, his family and friends besides the revenues generated from Build A Bazaar (Infibeam’s e-com platform that enables anyone to build an online store and also feature Infibeam’s products under its banner). In an earlier interaction with Techcircle.in Mehta had said that he preferred bank loans to drive business as external investors expected much higher returns and brought in covenants.
But from here on, the company would need to raise cash to grow its business and compete. Flipkart, the country’s largest e-commerce firm, had started around the same time as Infibeam but become much larger. Recently, Flipkart has reportedly raised its fourth round of funding and even struck 2-3 acquisitions to expand and strengthen its business as global e-tailing giant Amazon sets its sight on India.
Infibeam has been ramping up organically and made new hires over the past few months. Its employee strength is up from 400 last August to around 600 as of January 2012 (excluding the recruitment done for the last-mile logistics). Infibeam Logistics’ (an in-house last-mile logistics delivery system) delivery capabilities have been expanded to Ahmedabad and it will further expand to Chennai and Kolkata by March this year.
The company already has its own logistics operations in Delhi, Gurgaon and Noida besides the recently added Bangalore and Mumbai centres. It is planning to expand to around 25 cities by the end of 2012.