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Exclusive: Myntra to buy stake in former PE exec’s fashion e-commerce startup

29 November, 2017

Flipkart group’s fashion and lifestyle e-tailing arm Myntra is likely to acquire a stake in Mumbai-based women-focused online fashion platform 20Dresses.com, a person directly in the know told VCCircle.

However, the person mentioned above did not disclose the size of the transaction.

The deal has been structured as a performance-linked equity investment, where Myntra’s investment into 20Dresses will be tied to the company’s net sales on both Myntra and Jabong, on a year-on-year basis. The deal is likely to have been struck sometime between July and August this year, the person added.

20Dresses currently sells its women’s fashion merchandise on both platforms.

The equity investment deal is part of Myntra’s brand accelerator programme, Ananya Tripathi, chief strategy officer and head of sports and international brands at the e-tailer, confirmed. However, she did not elaborate on the nature and size of the deal.

“20Dresses has seen phenomenal traction since its launch on Myntra and Jabong due to its trendy designs, sharp price-points, efficient and scalable supply chain and solid team. Through this partnership, we aspire to build 20Dresses as a leading women’s fashion brand in the country,” she added in an e-mailed response.

Launched in December 2016, Myntra’s brand accelerator programme identifies domestic fashion brands and promotes them on its sales platform. The programme also provides insights on marketing and selection bets based on consumer behaviour data.

In March this year, Tripathi told VCCircle that the programme will onboard 10-15 domestic brands every year in an arrangement that would also consider equity partnerships with these brands. Over the next three years, these brands are expected to bring in $500 million in terms of valuation for Myntra.

Recently, when Myntra announced that its private labels business had turned profitable, CEO Ananth Narayanan also reiterated that the e-tailer will consider strategic investments as part of its overall growth strategy.

20Dresses, operated by Outletwise Retail Pvt Ltd, was founded in 2012 by Sumant Kasliwal. The platform is a members-only fashion platform for women and offers a personalised user interface for every user, who can see curated products based on their preferred fashion styles.

Prior to founding the startup, Kasliwal worked in the private equity investments division at ICICI Venture, the PE arm of private sector lender ICICI Bank. His other stints include Microsoft, Star India, and Arthur Andersen.

The five-year-old startup, which has its in-house fashion and styling team, sells merchandise such as apparel, accessories, bags, and shoes. While the company is yet to file its financials for 2016-17, during 2015-16, the company registered a 90% rise in revenue at Rs 7.6 crore from Rs 4 crore in the previous financial year, the company’s filings with the Registrar of Companies show. However, total expenditure also rose close to three times or 162.5% to Rs 10.5 crore from Rs 4 crore the previous financial year. The rise was attributed to increased marketing expenses as well as promotions and discounts.

In 2015, 20Dresses raised $1 million in angel funding from multiple investors including Srinivas Aluri, managing director at Morgan Stanley; Srinivas Modukury, a former Lehman Brothers executive; and BS Nagesh, former CEO and non-executive chairman of Shoppers Stop and founder of Trust for Retailers.

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Exclusive: Myntra to buy stake in former PE exec’s fashion e-commerce startup

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