Delhi-based Valyoo Technologies, which runs a string of vertical e-shops (Jewelskart.com, Watchkart.com, Bagskart.com and Lenskart.com) raised $10 million in series B from Unilazer and IDG Ventures few weeks ago, in a market where VC firms are being selective in making fresh investments in e-commerce as a sector. We caught up with Peyush Bansal, founder and CEO, Valyoo on the funding and plans ahead with the capital raised. Here are the edited excerpts:
What has the capital raised been utilized for so far and what are the plans?
The major areas of thrust have been to enhance the backend of all our verticals. We have been doing some major enhancements towards that. Also we are primarily working on the designing aspect of the products, to improve the quality of products. Since we have introduced private label in all our categories we now have a full-fledged design team to improve our in-house merchandise. We are also working with consumer research firms to know what exactly the consumer wants, so that we can make the sites more engaging.
In a market where we are seeing less VC interest in e-commerce, how did you manage to raise $10 million?It is not that e-commerce as a sector has not been doing well. Only that companies who don't have the right numbers won't get investments. Besides that, due to some failures the whole sentiment had become negative. But things are improving now. Many other companies are also getting funded.
How did you convince the investors? Were there apprehensions regarding the fact that you are into niche play?Firstly, there is always more convincing required in series B than series A. In the first round it's more of a gut of investors as well as promoters but by the time of series B, things are much clearer and investors want to see data. As a company also, we have much more data to share by the time we reach series B stage. It automatically becomes a time-taking process. For us the whole process took about 3-4 months. We approached a selected few investors and out of that also 2-3 were genuinely interested.
Secondly, being in niche play is not really a negative point, I feel. In fact niche sites have been delivering more lately. Yes, if execution is not done properly niche verticals are hard to sustain but there are many examples of niche e-com players who have managed to scale up. So being in vertical e-com didn't really put investors off. Initial reaction from investors always is to look at core data.
How different is running four different vertical sites viz a horizontal player who has the same categories? How is your positioning and strategy different?
At Valyoo, we think of all four verticals as independent businesses. On the other hand if you are a horizontal player, you can't give the same kind of focus and depth to each category. So that is really the only strategy for us to look at them as separate companies in our portfolio. Even our marketing and advertisements will never have all verticals in one. Yes, we do push our consumers to our other verticals when they come on one but apart from that it's all standalone entities for us.
You had earlier plans to add newer verticals but then put off those plans. Any reasons for you to revisit the strategy?No. We don't see any new vertical coming up any time soon. We are very focused on enhancing the depth and quality in the existing categories.
How are all your verticals doing? Which one is the best-selling vertical?
All our verticals are doing fine. We are now doing about 1500 orders a day across all four verticals. Our average order value stands consistent at Rs 1500. However, category-wise definitely since Lenskart was our first launch and is a flagship product it is the most popular. However, I would not like to associate the term best-selling with any verticals. I feel that both Lenskart and Jewelskart have kind of redefined the market trends. With Watchkart and Bagskart however we are still trying to differentiate ourself from the horizontal players.
We recently spotted 'Home Try-on' feature on Lenskart. Please tell us more about it.
Home Try-on is a new feature that we have launched at Lenskart. In that if you want to buy specs from our site but are not sure about the power of your eyes you can book an appointment by paying Rs 100. We will send an optometrist with the equipment to your address and you can get your eyes tested. It involves a lot of logistics but we are very bullish on it. Currently it is available in Delhi and are launching in Bangalore very soon and then in Mumbai.
Would you look at a hybrid model? Anything in works?Yes we are. We have already started a pilot on offline stores in some cities. Right now I can't share more details on that.
(Edited by Prem Udayabhanu)