IMbesharam.com, an adult products e-store, has raised $4 Mn (INR 27.2 Cr.) in a Series A round of funding led by two unnamed US-based angel investors. The company is now valued at $20M, after the funding.
“We plan to raise a second round of funding by the third quarter for another $4 Mn to support the expansion plans,” said Raj Armani, co-founder & COO of IMbesharam.
When asked about plans for the current year, Raj told Inc42, “The first and foremost is a fully redesigned mobile site to cater to the uber demand of mobile shoppers. Next we are investing in setting up four warehouses in four metros to drastically improve delivery times. We plan to launch our US store and market extensively to the Indian’s and South Asians living in USA & Canada.”
Market Size & The Numbers
The sexual wellness and adult toys market in India, is worth somewhere around INR 2500 Cr. “Of the total market, we think we have 1-1.5% share but that’s only because we have not gone for it. Being the nature of the business as such, we had decided to stay low for first two years to test the waters,” Raj added.
When started 2 years back, the startup’s average ticket size was somewhere between INR 1600-2000, which has now grown to INR 3,200. According to Raj, there are also shoppers who spend about INR 10K – 25K everyday. The company’s gross profit margins is around 250-300% and varies during seasonal sales or new product launches. It receives over 2 Mn visitors yearly, of which, 24% return visitors and had GMV of INR 29 Cr. last year. Its order for the month of December 2015 was over 6K and a total of 78K in the whole year (2015).
The company currently gets maximum traffic from Delhi, Bangalore, Mumbai, Chennai and Hyderabad. Besides, it has also started adding good chunk of customers from Jaipur, Surat/Ahmedabad and Kolkata.
The platform showcases over 120 international brands of Adult Toys, Bedroom Games, Sensual Lingerie, Sexual Wellness products for Men & Women used for Romance, Foreplay and Fetishes, and have a wide range of bachelor and bachelorette party products. The products are sourced directly from the brands in the US and from two of the US largest suppliers of adult products and novelties.
Speaking about the demographics of the users, Raj said that at the time when they have launched, the male: female traffic ratio was 70/30 but sales were 87/13 from the same visitors. Now they witness 64/36 ratio in traffic, and the sales from women shoppers has risen to 38%.
Besharam’s founders have together had invested close to $2 Mn so far in establishing the brand, R&D, setting up a custom logistics operation, technology & software, marketing & brand building, celebrity endorsement & productions, inventory & warehouse/offices and other standard capital & operational investments.
Other players in this space include That’s Personal, PrivatelyUrs, ShyCart among others.
Speaking about competition, Raj said, “We think a healthy competition benefits all and while we are able to provide an expansive collection, and cater to a wider audience, we understand the challenges we have. However going forward when the taboos associated with this lifestyle are shunned, we think the bigger players will then proactively want to go for a bigger share and at that time, we need to be ready and prepared for to stand on our own. As of today, we command a leading position not only as a adult brand but also a leading destination for a more satisfying lifestyle.”
The company had also roped in Sunny Leone as the brand ambassador. Raj said that this was probably one of their best decisions and the way Sunny has established her brand in US and that has definitely worked in their favor. “While our contract is a confidential one, I can tell you, we paid her over $200k for her endorsement, the production and rights for using her name in perpetuity.”
The startup will use the raised capital for launching its US store, which will cater to Indian audiences in the US & Canada, setting up 4 warehouses in India, hire quality talent in India & the US, launch completely responsive site for 2016. Out of 4 Mn, the company has dedicated $1 Mn for investing for a nationwide marketing campaign to reach out to a wider audience.