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E-distributor Just Buy Live raises $100 mn

24 August, 2017

Just Buy Live Enterprise Pvt. Ltd, an e-distributor that connects shopkeepers with consumer brands, has raised $100 million (Rs 640 crore) in Series B funding from Dubai-based investment banking firm Ali Cloud Investment, it said on Thursday.

The Mumbai-based company will use the funds to expand into international markets with high density of small enterprises and fragmented distribution, and to consolidate and grow Indian operations, it said.

SM Ali, chairman of Ali Cloud, said in a statement, “Just Buy Live is now ready for global expansion…we will quickly move to enter new markets with strong local partners.”

VCCircle had reported in September 2016, citing Just Buy Live chairman and CEO Sahil Sani, that the company was seeking to raise $30-50 million and looking to hire an investment banker to tap financial and strategic investors. It had raised $20 million (around Rs 136 crore then) in Series A funding from Alpha Capital in January 2016.

Launched in March 2015, Just Buy Live follows a brand-to-retail business model wherein retailers buy goods directly from brands. It has aggregated brands such as Apple, Xiaomi, Samsung, Micromax, YU Mobiles, Oppo, Patanjali, ITC, P&G, Unilever, Coca-Cola, Pepsico, Amul and Nestlé on a single platform.

The Just Buy app is used by retail outlets, from paanwallas and kiranas to supermarkets, chemists, mobile stores and electronic shops. As of September 2016, the app hosted over 5 lakh products from 2,600 brands across categories such as food, personal care, auto, mobile, tech, home, stationery and others.

The company was founded and is majority-owned by Sani and Bharat Balachandran. Sani, who is also chairman of Sahil International (channel partner to global audio and infotainment giant Harman International), had seed-funded Just Buy Live by investing $5 million in his personal capacity.

Prior to co-founding the startup, Balachandran was involved in the distribution of banking and financial services industry products.

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Pushpak . 10 months ago

Interesting fund raise given that a cloud of gloom has enveloped much of the e-commerce hysteria in India. That is not to say, e-commerce wont grow in India. It will grow and will achieve massive scale, but everyone cannot be a Flipkart or Amazon or Bigbasket.

Lots of questions and observations about this deal.

(1) No mention of revenues, profitability, number of active retailers, number of repeat retailers, etc.

(2) Why did foreign and Indian venture capitalist, bankers, and private equity firms not participate? It’s highly unlikely that JustBuyLive management decided to ignore world-class investors and head to Dubai for financing as their first target investor. This is a HUGE issue. If the company is a star, why would world-class investors not participate? there is more than enough money in the market (i.e., VC’s call it dry powder) to fund promising opportunities.

(3) Similarly, no involvement from strategic investors such as Dehlivery, JAVAS, and other logistics providers?

(4) Distribution reach is a major source of competitive advantage in India. Unilever, for example, reaches over 350,000 villages and cities through its network of distributors. Why would such brands offer a better deal to JustBuyLive than they do their own forwarding agents or distribution centers. If JustBuyLive does not have a cost advantage in procurement (i.e., does not receive a better deal), how can it compete with the traditional disorganized distributors who have gowdowns all over India and in proximity to retailers (i.e., Kirana).

(5) Moreover, this company indirectly competes with Amazon, Flipkart, Nykaa, Snapdeal, Tolexo, Bigbasket, 1mg, etc.

(6) The company also indirectly competes with big box retail such as Big Bazaar, Nature’s Basket, Reliance Fresh, D-Mart, etc.

(7) Who is Ali Cloud Investment? The media statement mentions that Ali Cloud is a Dubai-based boutique investment firm. But a quick look at its website suggests that this is a family-run business that has used WordPress boilerplate templates to create a investment firm-like website. The company lists no other investments in technology in India. Moreover, its past projects have included “market studies” “surveys” and “research studies.”

(8) No mention of participation from Alpha Capital. Did Alpha Capital not participate in this round?

An article on another website mentions that the founders of JustBuyLive hold a majority share. Assuming that they still hold about 60%. A $100 Mn round would result in a valuation of $166 Mn (or over 1,000 crores). Even Zomato is reportedly not valued at more than $300 – 400 Mn!! Snapdeal was recently valued at $800-900 Mn.

Pushpak . 10 months ago

Correction: A 100 Mn round would result in a valuation of $250 Mn (or over 1,600 crores) if the founders held 60%.

E-distributor Just Buy Live raises $100 mn

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