Venture capital firm Nexus Venture Partners has picked up a stake in the wholesale cash and carry business of shoe retailing firm Bigshoebazaar India Private Ltd. The deal, which was closed in late 2010, involves Nexus investing Rs 10 crore ($2.2 million) in the firm which helps retailers in small town source brands from Bata to Reebok.
Bigshoebazaar is planning another round of funding and is already in talks with a few players, said co-founder Manmohan Agarwal. The amount of funding or the players in talks with company were not disclosed.
The funding will help the company expand its wholesale network across the country besides the franchisee business. Bigshoebazaar's founders include Nitin Agarwal, founder of Brainvisa Technologies (Sequoia backed firm acquired by Indecomm) and former Vishal Retail Corporate Affairs CEO Manmohan Agarwal. Other founders are Danish Ahmed and Rajul Jain, ex-Vice President of Indiabulls Real Estate.
The firm started operations in mid-2009 and now has more than 90 brands and 25,000 designs of footwears and accessories. Its clients include Lotto, Columbus, Woodland, Bata, Reebok etc. The firm has already started expanion to other goods like apparels, custom jewelry, bags, etc.
Suvir Sujan, co-founder of Nexus, confirmed the development to VCCircle. Bigshorbazaar also confirmed the transaction. Bigshoebazaar is a wholesale cash and carry platform which aggregates all the brands, which helps retailers source directly from one roof.
Bigshoebazaar supplies footwear from wholesalers to smaller retailers and players across smaller towns, who typically do not have access to brands and cannot place large orders. Through this process, brands also get access to newer and under-penetrated markets. While the catalogue of its goods is available online through bigshoebazaar.net, the company also has a sales force which deals with retailers.
The firm's online retail website, Yebhi.com, runs under a licencing agreement and also sells apparel products. Yebhi.com was earlier known as Bigshoebazaar.com.
Bigshoebazaar has also started franchisee business, where it offers shoe retailers to use it brand and retailers source the footwear from the company. The firm currently has 13 stores and Agarwal said that this business continues to grow organically.
Though the share of apparel & footwear is expected to remain around 5-6% of the household income in India, the opportunity remains very large. This market is expected to grow from Rs 931 billion in 2005 to Rs 1847 billion by 2015 reaching Rs 3,267 billion in 2025, according to a report by Motilal Oswal.
Nexus Venture Partners, which has $320 million under management across two funds, has funded companies like DimDim (recently acquired by Salesforce.com) and Komli Media. It also recently led a $12-million round in Jasper Innovative Marketing Solutions, which owns the group buying portal Snapdeal.com.