Myntra eyes another round of 40 million dollars funds

After neglecting Flipkart’s merger offer and raising 50 million dollars (over Rs 300 crores) through

a deal led by PremjiInvest, owned by Wipro Chairman Azim Premji, leading online fashion retailer Myntra is said to be negotiating another round of discussion to attract an additional 40 million dollars (Rs 250 crores). The recently concluded funding round also included Belgium-based investment firm Sofina and existing investors Tiger Global, Accel Partners, IDG Ventures India and Kalaari Capital.

Myntra is said to be in conclusive discussion with L Capital Asia and a few other investors to raise another round of funding at a higher valuation. The investors now hold about 80 per cent stake in the company with the rest owned by the founders and the senior management team. So far, Myntra has raised a total of 125 million dollars (about Rs 780 crores) of risk capital funding.

While on one hand, the portal is looking at growing to become India’s largest retailer, on the other, it would utilize the raised amount to increase mobile-led services, while focusing on expansion of in-house fashion brands. The company aims to reach a turnover of Rs 1,500 crores in fiscal 2015 and grow to Rs 10,000 crores in the next three to four years.

The current round of funding in Myntra is happening around the time when Flipkart has introduced its own fashion brand called Flippd having a range of men's apparel and footwear. The Flipped’s portfolio will soon be expanded to cover other categories such as women's wear, sunglasses and watches by the end of this quarter. The company has also started retailing jewellery, another high-margin category. As per industry estimates, branded apparel attracts up to 45 percent margins and private labels are able to bring in even higher margins of about 60 percent. For Myntra this segment contributes about a fifth of its total revenue, with fresh funds coming in, the company could now focus on expanding its fashion portfolio.

Many e-commerce ventures were able to attract investments since 2013 like online marketplace Snapdeal, which raised about Rs 300 crores; baby care portal FirstCry receiving about Rs 92 crore and lifestyle portal Jabong recently received 27.5 million dollars (over Rs 170 crore) from the UK's CDC.