Friday 14 August 2015

Lingerie e-tailer Zivame close to raising $40 million

Lingerie etailer Zivame is close to raising $40 million in funding led by Malaysian sovereign wealth fund Khazanah Nasional Berhad and Mumbai-based investment firm Zodius Capital, according to three people directly aware of the matter.

The deal is likely to value Zivame at close to $100 million, according to one of the persons quoted above. "Zivame will invest the cash in discounting, expanding private label and marketing," said another person.

Zodius Capital, Khazanah Nasional Berhad and Zivame did not respond to email queries on the proposed fund raising.

According to a report accessed by ET, Zivame is looking to close fiscal 2015 with Rs 50 crore in gross merchandise value on a loss of about Rs 35 crore. It last raised funding of about $5 million in late 2014 from existing investors Unilazer Ventures, IDG Ventures and Kalaari Capital.

Zivame initially started out as an aggregator of lingerie brands like Enamor, Wonderbra, Jockey, and Amante. But since 2013, it started private label brands to make up for the restricted customer base. The company gets about 30% of its sales from its private label high-margin Penny and Cou Cou, brands. Zivame, which claims to be India's largest online lingerie store, sells selections ranging from everyday lingerie essentials and maternity wear to shapewear and nightwear.

Since last year, the Bengalurubased company has pioneered many services including 'Try at Home' and 'Fit consultants,' and currently has a 12,000-square-foot warehouse that processes delivery orders within two hours.

Other players in the category include Pretty Secrets, and in the online lingerie space. Smaller competitors such as Bengaluru-based Oyegirl shut down last year.

According to a report by Indian Retail, last year, the total lingerie/sleepwear market in India is currently valued at $3 billion, of which around 1% is online.

In five years, this is projected to reach $5 billion.

Last September, Pretty Secrets raised $2 million in Series-A funding led by Orios Venture Partners.

Its other investors include Indian Angel Network (IAN) and Harvard Business School Alumni Angels.

Experts say the choice online offers to buyers, privacy of purchase, unlimited shelf space, and a wide distribution network, makes online lingerie a lucrative business opportunity. However investors eyeing the space have a dim view of the size of exit prospects.

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