Online classifieds marketplace Quikr has acquired Bengaluru-based used goods marketplace Zefo, for INR 200 Cr ($28.51 Mn).
With Zefo, Quikr is looking to further scale its pre-owned goods and services vertical. Pranay Chulet, founder and CEO of Quikr, said that as a combined entity, the companies will be able to offer a broader selection of products at even more competitive prices.
Rohit Ramasubramanian, cofounder and CEO, Zefo said, “With this transaction, the capabilities we have built and the offerings we have honed can now be offered to Quikr’s large customer base.”
Zefo was founded by Arjit Gupta, Himesh Joshi, Karan Gupta, and Ramasubramanian in 2015. This startup manages its end-to-end operations, including product refurbishment and repairs of its sold products, in order to ensure a higher degree of standardisation.
Prior to this round, Zefo has raised $19 Mn from investors such as Sequoia India, Helion Venture Partners and Singapore-headquartered VC fund BEENEXT. The company has expanded to four cities and provides over 10K unique products across four major categories.
Why Zefo Is A Good Fit For Quikr?
In a statement, Quikr said that its first acquisition in pre-owned goods category is in line with its overall strategy of going deeper in key verticals.
Quikr launched Quikr Assured products and services around the second half of last year. Quikr Assured refurbished products are available in categories such as Furniture, Electronics, and Appliances.
With the acquisition, Zefo joins powers with Quikr Assured products, which grew 230% Y-o-Y in FY18-19 and has also turned cash flow positive.
Sarath Chandra Gudlavalleti, VP, QuikrBazaar, said, “With the best of Quikr and Zefo coming together, we will double our strength in the quality assurance process, logistics, marketing, and retail, thus raising the bar in the refurbished market.”
Unlike Quikr, which simply connects the buyer and seller, who then schedule the product pickup and payment among themselves, Zefo has a full-fledged operations and logistics team, including capabilities such as repairs, delivery and quality checks.
Quikr And Its Acquisitions
The company has raised a total funding of $350 Mn (INR 2,483.7 Cr) from investors such as Tiger Global, Kinnevik, Warburg Pincus, Matrix Partners, Norwest Venture Partners, eBay, and Nokia Growth Partners.
The company has taken an inorganic route to growth, relying on acquisitions to strengthen its various businesses. Till date, Quikr has acquired 15 companies including HDFC Developers, Commonfloor, Babajob, Hiree, Zimmber, and ZapLuk.
Most recently, Quikr acquired Chennai-based real estate platform India Property Online Pvt Ltd for an undisclosed amount. The acquisition of India Property’s full stack model will help the company grow its transactions and add to its classifieds base, Quikr’s Pranay Chulet said.
In March, Quikr was in talks to acquire Zefo for approximately $28.5 Mn (INR 200 Cr.) in an all stock deal.
Refurbished Market In India
A Zinnov report had stated that online resellers space has been predicted to grow to $48 Bn-$60 Bn by 2022. Also, the market share of online resellers is expected to rise from the then 1.2% of the Indian retail market to 5.4%.
Quikr, which competes with OLX and eBay and already lists refurbished products advertisements on its platform, will now also take on Cashify, InstaCash and others in the refurbished goods market.
The quality-tested pre-owned products market in India is expected to reach $12-15 Bn in the year 2020, clearly showing the country’s appetite for pre-owned goods.