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Indiaplaza unable to raise funding, about to ring down the curtain

Indiaplaza, one of the first e-commerce ventures in India, is in the final stages of pulling down the shutters, sources close to development told Techcircle.in. The e-commerce company is unable to raise any fresh capital and has also sent a notification to all its vendors for negotiating and settling their final dues.

The last fundraise for Indiaplaza happened in 2011 when it raised $5 million from Kalaari Capital (then known as IndoUS Venture Partners). Talking to Techcircle.in last year, K Vaitheeswaran, founder and CEO, Indiaplaza had mentioned that the company was looking to raise next round in mid 2013, but that didn’t happen. There have been rumours in the market about the venture calling it quits for some time now.

Interestingly, when we reached out to Vani Kola, managing director, Kalaari Capital, to get some insight on the development, she said, “We are no more a part of Indiaplaza.” It’s most likely that the VC fund has written off its investment in Indiaplaza.

Indiaplaza

While the site is active as of now, everything on it is ‘out of stock’ and when we tried to reach out through the customer care number it seemed to be out of order.

An email questionnaire sent to Vaitheeswaran did not elicit a response. However, after taking our call, he averted all questions saying, “I am not well and not in a position to talk as of now.”

Indiaplaza was launched as Fabmall.com in 1999, making it one of the first e-commerce ventures in India. Prior to a Series A round in 2011, the company had raised $3 million in angel funding between 2004 and 2011, from Indigo Monsoon Group.

Talking to Techcircle.in last year, Vaitheeswaran had mentioned that the e-tailer was selling one lakh items per month or 3,000-4,000 items daily. He shared that in terms of volume, books were the largest selling items and in terms of value, it was electronics. On his plans of fundraising, he had said, “We do not want to go into multiple series of funding till we prove to ourselves to the stakeholders that it will be a profitable and sustainable model this time around. Once we do that, we will decide if we want to do an IPO or stick to Series B.”

A number of e-commerce players are finding it hard to sustain in the current volatile market environment. While on the one hand larger players like Flipkart and Snapdeal have managed to raise over $100 million capital, the smaller ones are either shutting down or merging/getting acquired to ensure survival.

We are trying to get more details on Indiaplaza’s shutdown and shall update the post.

Recent e-com casualties

Bangalore-based Uniworld Lifestyle Solutions Pvt Ltd, which launched the fashion and lifestyle e-store MiraiStore.com in April 2012 shut shop recently.

In May 2013, premium apparel and accessories e-tailer Rock.in, a brand owned by Mumbai-based Rock In Fashions Pvt Ltd, closed down.

Aporv.com, an online marketplace for Indian handicrafts which is owned by Bangalore-based Aporv Crafts Pvt Ltd, stopped taking new orders in May this year.

Online toystore Wopshop.com shut shop within a year of launching their operations.

Babycare products e-tailer A2zbaby.com shut down operations in November last year.

In October 2012, Mumbai-based Shopveg.in, an e-tailer of vegetables, fruits and groceries, pulled its shutters down due to lack of capital.

(Edited by Joby Puthuparampil Johnson)

5 Comments

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Indiaplaza Employee July 16, 2013 11:30

I am an ex-Indiaplaza employee and was a victim of the closure. With all the experience gathered for over a decade, and being the first player in marketplace model, IP really had the opportunity to make it big, very big indeed. With all due respect, it’s the inefficiency of the CEO Mr. Vaitheeswaran that has dragged IP to this state. Wish if the earlier founders of fabmall.com like Mr. V. Sudhakar (currently founded Bigbasket.com) and others continued to head the affairs so that IP could have turned into a reckoning force in Indian e-commerce. We also heard that Ms. Vani Kola had offered to fund more if Mr. Vaitheeswaran can step out, which was very much turned down. Situation turned so worse that the statutory compliance was not followed for the last FY that the extent filing TDS or PF or such and the present board of directors could soon face legal charges. These comments may or may not be published because of the allegations being made, but unfortunately that’s the truth.

Anil July 16, 2013 15:31

thats really sad….

Sumit Rajoli July 16, 2013 16:50

Even I, as a VENDOR am victim of IP.

This incidence happened around April 2013, wherein they did not even pay us our Due Payment !

They Stopped taking calls, Stop Responding to mails, Concerned Executives started shrugging off their responsibilities saying they are either on leave or have resigned and all such things… Resulting into duping us of the Payment.

Same thing happened with us in case of Sevetymm.com as well.

Fed Up and irritated… i had to let go the payment and since then i have confined myself only to Big Players like Snapdeal, Shopclues, Flipkart and Tradus.

Irfan July 17, 2013 11:10

I am an employee too of Indiaplaza. They havent paid my salary since 8 months. B*******

chozhiyattel July 18, 2013 10:42

I placed an order for a few books recently. But, ever since, I have not been able to contact them and the books have not yet been shipped. No response online or to phone calls.

It appears I have lost my money which is already charged to my debit card.

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