Paytm Backs $50M Funding For Zovi, India-Based Online Fashion Retailer
ZOVI an India-based online men’s fashion retailer, has raised $50 million to build “Little,” a mobile-only app to list a large number of “hyper-local” deals offered by offline merchants to consumers online.
The funding round is led by One97 Communications, which operates Paytm, a mobile wallet and online marketplace, in which Alibaba Group Holding Ltd. has astake. Existing investors Tiger Global Management, SAIF Partners and a new unnamed large investor also participated in this funding round, Zovi said, in a press release on Wednesday.
The app will list “real-time hyper-local deals to customers across services like restaurants, movies, hotels, salons, gyms and spas,” according to Zovi.
More people access the Internet and related services in India using their smartphones than PCs, and India is projected to become the second largest smartphone market in the world by 2017, overtaking the U.S. This has prompted e-commerce startups to aggressively promote a “mobile-only” sales strategy, increasingly forcing consumers to download mobile apps if they want to shop online.
Zovi founders Manish Chopra, a former Microsoft Corp. executive, and Satish Mani, a former senior vice president at travel startup Cleartrip.com, expect to build Little into a large business that will target a consumer lifestyle marketplace, they said, in the press release.
Little will use the funds to build a network that connects merchants with buyers, hire senior executives and build new technology to focus on the Indian “online to offline” market, which is estimated to be worth $64 billion by 2016, according to the press release.
Zovi plans to grow Little to offer more than 50,000 live deals across 11 cities by March 2016, presenting a “discovery platform” to consumers on the one hand and, on the other, a strong sales channel for offline merchants, whose deals will be listed on the app.
The app currently lists deals from some 5,000 merchants in 11 cities and Zovi estimates Little will end the current fiscal year on track to sell deals worth $170 million. The company expects to increase its staff strength to 1,000 by then, from 400 employees today.
Paytm’s investment in Zovi brings with it a partnership that will tap into the former’smobile walletthat consumers can use to pay for deals on the latter’s app.