ShopClues Raises $16 Million , Could Break-even by Diwali: CEO
Sanjay Sethi, CEO & Co-founder, ShopClues. (Image: Shopclues)
New Delhi: E-commerce platform ShopClues has raised $16 million (about Rs 110 crore) this year from some of its existing investors as part of an internal round and is hopeful of reaching break-even by Diwali this year, according to an internal e-mail sent to employees.
Seeking to assuage concerns among employees, ShopClues CEO Sanjay Sethi said despite challenges like Walmart-Flipkart's $16 billion deal, the company is confident of profitability and growth targets and its resolve for "fiscal discipline" should not be mistaken as a "sign of weakness".
Sethi, in the email sent earlier this week, said the company has "raised about $16 million additional funds, which is more than sufficient to get us to profitability and our growth targets".
Over the past many months, there have been speculations about ShopClues' fate. According to industry sources, the company has held discussions with multiple e-commerce players for a possible sale. There were also reports that the company is laying off employees.
The company, on its part, has maintained that its revenues have continued to grow as the company trims losses.
Sethi, in his e-mail, said the company has reduced its burn from $5.5 million in January 2017 to under half a million dollars a month currently.
"And if we continue executing per plan - this Diwali, we will break even for the first time ever. It will be a great milestone and a strong validation of our strategy and execution," he added.
In a blogpost, Sethi said "there will be a tendency to write-off ShopClues which has stuck to its core strategy of enabling hundreds of thousands of small and medium-sized enterprises (SMEs) to connect with millions of customers in a capital efficient manner".
"People can easily misunderstand our resolve around tight fiscal discipline, keeping costs low, focus on certain categories and geographies as signs of weakness. They may start speculating or predicting dire outcomes," he pointed out.
Sethi said ShopClues generates about 20 per cent of its revenue from its technological and operational services and is growing 100 per cent quarter-on-quarter.
"ShopClues will continue to invest in technology and operational capabilities to keep the cost down and sustainably grow the topline at a pace complementing the coming of target consumers online," he said.
For the fiscal ended March 2018, ShopClues narrowed its losses to Rs 208 crore from a total loss of Rs 333 crore in 2016-17. The total revenue from operations grew 45 per cent to Rs 275 crore in 2017-18, from Rs 189 crore in the preceding fiscal.