Wooplr Technologies Pvt. Ltd, which enables social commerce via an eponymous online fashion portal, is in talks to raise up to $20 million (Rs 137.89 crore at current exchange rates) in a Series C round of funding, two persons directly in the know told TechCircle.
The fresh capital will be raised from a mix of Indian and China-based investors, said one of the above-mentioned persons on the condition of anonymity. The identity of these investors could not be ascertained.
Wooplr is likely to seal the transaction within the next few months, said the second person.
Separately, a glance at the company’s Ministry of Corporate Affairs filings show that it raised Rs 3.5 crore (around $500,000) in venture debt from Trifecta Capital in June.
The infusion, which included a mix of compulsorily convertible preference shares (CCPS), equity shares and debentures, is likely to have valued the five-year-old venture at around Rs 220-230 crore ($32-33.5 million), according to back-of-the-envelope estimates. However, the second person cited above said the firm had been valued closer to $40 million.
Arjun Zachariah, co-founder and chief executive officer of Wooplr, told TechCircle that the venture debt was raised to meet working capital requirements. He also confirmed that the company was in talks to raise its Series C round, but did not divulge further details.
Wooplr had last year raised $8 million (around Rs 53.6 crore) in a Series B round of funding from Sistema Asia Fund, Singapore-based private equity firm Amereus Group and existing investor Helion Ventures.
Besides, it is also backed by the likes of Astarc Ventures and other prominent individual investors including former Snapdeal chief product officer Anand Chandrasekharan, InMobi co-founders Naveen Tewari, Abhay Singhal, and Amit Gupta, TaxiForSure co-founder Raghunandan and former Puma India chief executive Rajiv Mehta.
Wooplr was founded in 2013 by four former McAfee employees - Zachariah, Soumen Sarkar, Ankit Sabharwal and Praveen Rajaretnam.
Rajaretnam quit Wooplr in January last year and is currently serving as the senior product marketing manager at ad-tech unicorn InMobi, according to his Linkedin account. Sarkar's LinkedIn profile indicates that he moved on in 2016.
Wooplr started off as a social commerce platform where it roped in top social media influencers to act as sellers for fashion brands on its platform. Sellers used to share content about the product and the platform then facilitated sales.
However, since April last year, anyone with a presence on social networking platforms can come on board as sellers and the company helps them open a mobile store front.
“The initial focus on top social media influencers helped in capturing the first 10 million customers. However, we realised we had to open up our seller base in order to capture the next 300 million internet audience in the tier-2, 3 and 4 markets” Zachariah told TechCircle.
Each seller on the platform can choose from more than 100,000 products across 500 brands available on the Wooplr network and create a customised store. Subsequently, they can start selling products to friends, family and followers on their social media accounts including WhatsApp, Facebook, Instagram and YouTube.
Zachariah said that the USP of their business model is that it translates into a zero investment for the brands in terms of marketing costs.
Whenever an end consumer shops on the storefront, the sellers get paid a commision and the money is transferred to either their bank accounts or Paytm. Wooplr claims that sellers can earn upto 25% as commission on its platform.
The Wooplr store owner network is 3 lakh-strong and is present in 250 tier-1 and tier-2 cities and towns in 29 states across the country. Around 20 brands on the platform also sell directly from China.
“Over the last nine months, we have achieved a 10x growth in terms of revenues and order volume and this is expected to continue over the next five to six months as well,” Zachariah said, attributing the rise to Wooplr’s geographical expansion.
The company recorded a 11-fold rise in operational revenues at Rs 3.21 crore in the financial year 2016-17, up from Rs 28.24 lakh the year before.
Wooplr managed to keep its gross expenditure in check, limiting it to Rs 20.44 crore in 2016-17, a marginal rise from Rs 19.81 crore in the previous fiscal.
Consequently, net losses came down to Rs 17.06 crore from Rs 18.78 crore in 2015-16
Deals in the space
A couple of startups in the social commerce space have raised funding in the recent past.
Last month, Mumbai-based Shop101, a mobile storefront and commerce platform for sellers, raised $5 million (Rs 34 crore) in a Series A round led by Stellaris Venture Partners.
Founded by Nilesh Kothari and Rahul Khanna, Trifecta provides early-stage debt capital to Indian companies, primarily in the technology sector.
It backs companies out of its Rs 500-crore maiden fund, which counts RBL Bank and Azim Premji Trust as anchor investors.
Trifecta has invested in more than 30 companies, including BigBasket, PaperBoat, Rivigo, Nephroplus, Urban Ladder, Industrybuying, OneAssist, UrbanClap and IdeaForge.
Earlier this year, the firm said it was planning to raise its second debt fund with a target corpus of Rs 500 crore ($74 million), along with a greenshoe option to raise another Rs 250 crore.
The venture debt provider is looking to mark the first close of the new fund at Rs 250 crore by the end of 2018.