Fashion and lifestyle online retailer, Jabong have raised $100 Mn in a fresh round of funding. Out of a total of $100 million (Rs 628 crore), Jabong had raised $27.5 million (Rs 173 crore) from British development finance institution CDC, but details of the others who have invested in the round is not available at the moment.
“With CDC’s help, management is introducing a new Code of Conduct for suppliers, which will set standards and assure the adoption of workers’ rights. The goal is to become the first Indian member of the Ethical Trading Initiative (ETI), a voluntary organisation whose vision is ‘a world where all workers are free from exploitation and discrimination, and work in conditions of freedom, security and equity,” says official press statement by CDC.
Backed by Rocket Internet, Jabong was launched in 2012; it provides 4,000 local manufacturers within India access to consumers. It competes with Myntra which is also in the final stages of raising its next round of funding and had made headlines when there were talks of its merger with Flipkart.
In addition to Jabong, Rocket Internet also runs Cupo Nation, Fab Furnish, Foodpanda, OfficeYes, PrintVenue in India.
Recently there were rumors that Jabong might shut down, when two of its co-founders Mukul Bafana and Manu had left the company. We had contacted Praveen Sinha, co-founder, Jabong at that time, “The rumors about jabong closing down is not correct it might have been triggered as one senior member and Jabong has parted ways,” he said.
We caught up with Praveen Sinha, Cofounder, Jabong to know about the latest funding round and his experiences of running the company
Inc42: When have you raised funds? How do you plan to allocate them?
Praveen: Since our inception we have been supported by credible and well known investors. We have reputed investors who along with funding also bring their specific expertise like online business experience, fashion understanding and emphasize on wider social goals beyond profits. We recently closed a multi hundred million USD round where CDC has also invested as part of a larger round.
This will be used to enhance the technology platform both at the front end (website, mobile site etc) and back end, building widest assortment in the fashion space and further developing supply chain infrastructure.
Inc42: What’s the status of Javas right now? We heard that it’s a separate entity now?
Praveen: Javas is a separate entity
Inc42: Are you looking at acquisitions now?
Praveen: We are not looking at an acquisition at the moment
Inc42: Share something about the early days of Jabong. Any advice you would like to share with the aspiring entrepreneurs who are looking to enter the ecommerce space?
Praveen: Market mapping is the key to become successful in the ecommerce space or any business for that matter. Aspiring entrepreneurs should come up with unique and innovative ideas to avoid duplicity or create differentiation. Ecommerce offers a big opportunity for new concepts, categories and products.
5 things to keep in mind for setting up an ecommerce business are as follows:
a) Categories to operate-in and the target audience for the same
b) What model to follow-Inventory led or Marketplace
c) Cash Flow management/ Plan to raise funds
d) Team to execute-Sourcing strength for the categories you would like to operate in
e) Clear marketing strategy to reach end consumer
Inc42: What have been the biggest challenges you faced at the time of starting Jabong and what are the present day challenges?
Praveen: When we started, no one knew Jabong. We were very small and getting the right team, convincing them to join a startup was our first challenge. Thankfully, we were able to convince and form the team we wanted. Additionally, picking up the right kind of products in a short span of time involved a lot of forethought.