Social commerce platform Shop101 was reported to be in talks with Unilever Ventures and Kalaari Capital to raise $10-12 million. And, the first piece of fundraising plan has fallen in place as latter already has wired first tranche in the Mumbai based firm.
As per the company’s RoC filings, Rs 14.6 crore ($2 million approx.) has been poured in by the VC firm through issue of Unsecured Compulsorily Convertible Debentures.
The clause under which the money has been invested states that the company’s funding round is expected to be closed by January 18, 2019. The debentures are convertible into Compulsorily Convertible Preference Shares on a condition that Kalaari invests at least Rs 29.2 crore by the time the round completes.
To an extent, this ensures that Shop101 will receive at least over $4 million of the expected $10-12 million from the Vani Kola led venture capital firm.
Besides Unilever Ventures, the other existing investors including Stellaris Venture Partners and Vy Capital are slated to put in rest of the capital.
The proceeds will be deployed towards ramping up technological infrastructure and adding categories like beauty and personal care to its portfolio.
Competition in social commerce is intense with Amazon launching Spark, and Meesho leading the segment. Shop101’s model is similar to Meesho but the former differentiates on the premise of enabling web stores to small merchants and resellers.
Also read: With 300 mn+ users and $38 Bn annual GMV, China’s Pinduoduo is bigger than Indian e-tail
Meesho recently raised $50 million Series C and $11.5 million Series B in June this year alone, while Shop101 previously received a $5 million Series A round in July.
With 200-230k orders a month, Shop101’s growth is driven by tier III and IV cities.
Given that social apps claim the largest share of time on a smartphone screen, social commerce startups are expected to to build e-commerce solutions for the up and coming Internet user base in tier III and IV cities (i.e; Bharat).
Although, social commerce is in very nascent stage at the moment in India and it’s yet to be of significant size, only time would tell whether India can produce parallels to Pinduoduo or not.
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