Taggle Internet Ventures Pvt. Ltd, a Bangalore-based internet company which offers an online group buying platform, has received $8.75 million funding commitment from Battery Ventures and Greylock Partners. Taggle plans to use the funding, which is based on milestones, on areas like technology, marketing to drive traffic and a scale-up of its services.
The company, which launched its online group buying initiative, taggle.com, claims to offer a win-win situation for both consumers and merchants. Taggle leverages the internet (social and mobile networks) to create a community of shoppers who come together to give merchants volume business in return for bulk discount. Taggle partners with varied businesses ranging from wellness to beauty, travel, adventure sports, fast food and fine-dining.
Arvin Babu of Greylock Partners and Ramneek Gupta of Battery Ventures are also joining the board of Taggle. The start-up has also added Venkat Panchapakesan, former CEO at Yahoo! India R&D, on its board.
Taggle has initially launched its services in Bangalore, which it calls its "test market" and then plans a launch in "10 internet strong cities."
"We spent about four months understanding the markets, what customers want and issues faced by the trade," said John Kuruvilla, founder and CEO of Taggle, which has raised funding before its official launch today.
Kuruvilla said that some his observations were that customers want the proposition upfront and simple, not complicated with fine prints and asterix; the gimmicks to get footfalls leave customers disappointed; close to 20-25% of the shoppers get affected at the payment gateway; customers want offers that appeal to them, not anything that vendors give and sufficient time to redeem the offers.
"Internet is also a very small portion of the consuming public. One of our learning’s from Air Deccan was that there are many people who don't have the internet or do not want to transact over internet," said Kuruvilla, who was earlier chief revenue officer of Air Deccan, India's first low-cost carrier which acquired by Kingfisher Airlines. Kuruvilla was also executive vice president (marketing) at the Oberoi Group and has served stints at Leo Burnett and Contract Advertising.
To tackle some of these issues, Taggle has launched services like a contact center and Taggle Prepaid. Taggle Prepaid involves customers putting in the cash, like a mobile prepaid recharge, and gets a 2% bonus. The next time customer does not need to go through the payment gateway. Taggle also plans to market through SMS, where customer can call the Taggle contact center upon receiving the offer and pay through credit card over the phone. To help merchants against fraud, it has also created a security hologram based coupons.
Arvin Babu, Partner, Greylock Partners, which has invested in companies like Facebook and Linkedin, said, in a statement, “India is definitely one of the world’s fastest growing markets and we see great potential in the concept of Group Buying in India. The business proposition of Taggle is certainly promising and we are sure it will take the market by storm.”
Ramneek Gupta, Partner, Battery Ventures, who recently invested in the world’s largest group buying company Groupon, commented, “We are very excited about the value proposition that Taggle represents for both the merchants and the consumers and are delighted to be able to collaborate with an extremely passionate team to bring the concept to fruition in India.”
Groupon, the US-based group buying firm, had raised a $135 million round at a valuation of $1.35 billion led by Digital Sky Technologies (investor in Facebook and Zynga) and Battery Ventures.
Another deal in India in the group buying space recently was when Deals And You, a venture between the Group Buying Global AG & Smile Interactive founder Harish Bahl, acquiring Gurgaon-based Wanamo Marketing Pvt. Ltd (WMP). Group Buying Global AG has been promoted by Dr.Klaus Hommels & Oliver Jung, who have investments like Skype, Xing & Facebook.
The group buying space has seen India players like SnapDeal and MyDala already establish their presence in multiple cities. The competition is increasing in this space with other players like Grabbon, Koovs, Mobstreet, etc.
"It's still very early days (for group buying in India). For us, it's sticking to our business model and making sure the plan works. If competition grows its well and good, they grow the market together," said Kuruvilla.