Mumbai-based Kribha Handicrafts Pvt Ltd, which runs e-commerce marketplace for ethnic products Craftsvilla, has acquired on-demand logistics enabler Sendd.
The all-equity deal values the Kae Capital-backed startup at close to $5 million (around Rs 34 crore), Craftsvilla said in a statement.
Kae will get stake in Craftsvilla as part of the acquisition deal, Sendd co-founder Nav Agarwal told VCCircle.
"All e-commerce companies have their own logistics companies. We don't believe that it is capital efficient to go that way. Our vision is to make Sendd one of the largest logistics companies, which will power reach and efficiency for us," Manoj Gupta, co-founder and CEO of Craftsvilla said.
While Craftsvilla will strengthen its logistics capabilities with the Sendd acquisition, the latter will continue to operate as a separate entity and will be free to offer its services to other companies.
Mumbai-based Sendd, run by CrazyMind Technologies Pvt Ltd, was founded in April 2015 by IIT-Bombay alumni Nav Agarwal, Sumeet Wadhwa and Sargun Singh Gulati. Sendd has raised two rounds of funding, seed and bridge, from Kae Capital in the past.
Agarwal declined to comment on the amount Kae has invested in Sendd.
"We believe logistics is a very marginal business and to make it a sustainable one, we need to focus on volume. This can only be achieved by B2B play," said Agarwal. "Three major factors that we would be focusing on are - reducing the shipping cost, delivery time and returns."
An on-demand shipping services startup, Sendd allows users to send parcels anywhere around the world. It offers pickups, packaging and parcel insurance. Users of the app can click a photo of the parcel and schedule a pick-up.
"We won't be doing operations. It will be pure tech play, an enabler of logistics," said Agarwal.
Craftsvilla's Gupta said the startup's logistics engine can predict, in real time, as to which shipment should be given to a particular courier company based on efficiency levels.
Craftsvilla had raised $34 million in Series C funding from existing investors Sequoia Capital and Lightspeed Venture Partners in November last year. The company had then said it planned to acquire companies in the data sciences, ayurvedic products and yoga-ware space.
Founded in 2011 by husband-wife duo Manoj and Monica Gupta, Craftsvilla e-tails products across categories such as clothing, handicrafts, jewellery and art. It follows the business model of US-based Etsy, which created a successful P2P marketplace for handmade products.
In April 2015, Craftsvilla raised $18 million (around Rs 113 crore) from Sequoia Capital and others. Global Founders Capital, which is promoted by the Samwer brothers of Rocket Internet, participated in that round.
It also raised Rs 2.3 crore from Nexus and Lightspeed in an early-stage round of funding in 2011. In 2012, both the investors jointly invested around Rs 8 crore ($1.3 million) in the company's Series A round of funding.
Craftsvilla competes with NDTV's Indianroots, Cbazaar.com, IMBling, Indiabazaaronline, Indusdiva, Shopatplaces and Mirraw, among others. NDTV Ethnic Retail Ltd, a subsidiary of media group NDTV that runs ethnic wear-focused e-commerce venture Indianroots, raised $5 million in a Series A round of funding from Mumbai-based KJS Group last year. In 2014, Chennai-based Fashionista Retail Pvt Ltd, which runs Indian ethnic wear e-com site Cbazaar.com focused on the international market, secured an undisclosed amount in its Series B round of funding led by Indian private equity fund manager Forum Synergies. High City Retail Pvt Ltd, which runs Shopatplaces, raised an undisclosed amount of funding from Indian Angel Network last year.
The ethnic wear market is expected to grow at a CAGR of 8 per cent and reach $19,600 million in 2018, according to Technopak.