Gurgaon-based startup Clues Network Pvt Ltd, which runs the horizontal e-commerce marketplace ShopClues, has disclosed raising $4 million in Series A round of funding from an undisclosed investor. This was the second round of funding for the startup, which had raised angel funding to the tune of $2 million from a few US-based investors in August 2011. The Series A round was closed in January 2012.
ShopClues went live around the same time it closed its Series A. It works on a zero-inventory marketplace model where sellers can come and display their product catalogues.
According to the company founder and CEO Sandeep Aggarwal, the money raised in January this year would be utilised to fulfil multiple goals. "We are aiming to build the largest catalogue of products in India in a year's time and will also expand to more cities. Currently, we are shipping to 4,800 cities but we plan to reach 7,000 cities," he said.
The company would also set up at least seven fulfilment centres, thus scaling up from the present two. "We are about to finalise Jaipur, Hyderabad and Chennai as our select destinations and would be opting for Lucknow and Panipat next. Also, 70 per cent of our products are the cheapest in the market and we would like to take that up to 85 per cent," said Aggarwal.
Although the funding was closed in January, it was kept under the wraps till now and only disclosed to Techcircle.in. However, ShopClues has not started using the money and the capital should easily last for around 15 months.
Aggarwal claimed that ShopClues is recording around 2,500 transactions a day with an average ticket size of Rs 900. The company has done Rs 12 crore gross sales since its inception and is targeting Rs 100 crore by December 2012, he added. Also, consumer electronics, IT peripherals, sunglasses and mobile phones are the categories that are currently doing well on ShopClues.
"We have a very long-term plan for our company and going by this rate, we might become the first e-commerce company to become profitable. ShopClues would turn profitable by Q4 2013," said Aggarwal.
Prior to ShopClues, Aggarwal was a senior internet and software analyst at Caris & Company, a San Francisco-based, research-driven boutique investment bank. He had started ShopClues along with Sanjay Sethi, head of global product management at eBay). The initial set-up was bootstrapped with Rs 1 crore, personally invested by Aggarwal. A blogger with VCCircle, he is also strictly averse to the inventory-led e-commerce business model, followed by many of his competitors in India. Read more on that here.
Watch this space for the full interview with Sandeep Aggarwal.