Online shopping platform ShopClues.com is looking to invest close to $50 million in either buying stakes or acquiring as many as eight start-ups to accelerate expansion in India’s fast-growing e-commerce market.
The company, which is in the market to raise fresh funds, has kept aside close to $20-25 million in cash for the investments. The acquisitions will be largely stock-driven or acqui-hires—deals done primarily to access expertise of the acquired firm’s employees.
“Given the crunch in capital markets, ShopClues is seeing a lot of start-ups up for sale at reasonable valuations. Until two months ago, start-ups were quoting unreasonable numbers; however, the market seems more realistic now,” said Sanjay Sethi, co-founder and chief executive officer of ShopClues.
ShopClues, run by Clues Network Pvt. Ltd, has already picked up a high double-digit stake in Delhi-based hyperlocal services app HeyBiz, Sethi said without disclosing details.
“These start-ups might not be of interest to VCs but might make sense for the established e-commerce firms for their teams or expansion,” said Sumir Verma, founder of investment bank Merisis. “As venture capital (VC) firms become more stringent with their investment strategies, you will see a lot of acquisitions or acqui-hires going forward.”
Gurgaon-based ShopClues is also exploring deals in the ad-tech, payments and the consumer-to-consumer e-commerce category.
“We are looking at categories wherever we are too distracted to enter or want a faster foothold in,” said Sethi.
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