Singapore-based Qoo10 Pte Ltd has acquired ecommerce company ShopClues in a stock deal, the Indian startup announced today (October 31). Singapore-based Qoo10 services small and medium enterprises (SMEs) in Southeast Asia via a localised online marketplaces in Singapore, Indonesia, Malaysia, China, Hong Kong and other regions. ShopClues said Qoo10 would be expanding into other Asian countries.
ShopClues said the partnership presents new strategic opportunities for both companies and opens up cross-border commerce opportunities consumers and sellers in India as well as the regions where Qoo10 operates. The merger has been approved by the board of directors and major shareholders of both companies.
ShopClues claims it has more than 700K small and micro-merchants who will be able to reach customers in Qoo10’s Southeast Asian markets. The company’s statement added that Qoo10’s merchants and cross border logistics business will get access to the Indian market.
A source close to Shopclues who received an internal memo from CEO Sanjay Sethi told Inc42 that ShopClues is hoping the deal with Qoo10 will set the company up for success in the global market in the coming years. More details are expected to be revealed at the ShopClues’ town-hall meeting tomorrow, the source added.
Related Article: Shopclues Narrows Losses To INR 68 Cr Even With Reduced Revenue
ShopClues said it has over 60 Mn lifetime unique customers and services over 31,500 pin codes across India. But in recent times, the ecommerce unicorn has seen many layoffs and was reported to be looking for a new investment round. Sources close to the company told Inc42 in July that an M&A deal with Snapdeal was possible, which had been rumoured since earlier in 2019.
According to an ET report, which quoted anonymous sources, the transaction values ShopClues at $70-$100 Mn, which is a huge drop from its unicorn-level valuation in 2015. Founded in June 2010, Qoo10 is billed as the 10th most visited site in Singapore, and with more than 3 Mn registered users. The free and open ecommerce platform lets sellers and businesses of all sizes list their goods and customers from any country can purchase them.
The merger comes as a relief for ShopClues, which has been struggling with falling revenue and layoffs. In September, the Gurugram-based ecommerce platform received a fresh equity infusion of INR 7.86 Cr from its US-based parent entity. According to the Ministry of Corporate Affairs filings accessed by Inc42, the company issued 4,320 equity shares at a nominal value of INR 10 and a premium of INR 18,190 per share to Clues Network Inc.
ShopClues was founded in July 2011 by Sandeep Aggarwal, while Radhika Aggarwal and Sanjay Sethi joined as cofounders. It is a managed marketplace that aims to provide a unique online shopping experience to its customers. Sandeep exited the company after a spat with the board in 2016 and Sanjay Sethi took over the role of CEO. The company has raised over $1 Bn in funding from investors such as Tiger Global, Nexus Venture Partners, GIC, and more.
Update: October 31, 2019 | 23:20
An earlier version of this story erroneously referred to ShopClues as Snapdeal. The error has since been rectified.