According to the Economic Times (ET), Warburg Pincus may invest up to Rs.150 Crore in Indiamart.com. The deal may see an exit by BCCL, which had invested $3.5 million in Indianmart.com in 2007. Indiamart Intermesh is India’s largest online B2B marketplace for SMEs, connecting global buyers with suppliers.
Economic Times reported that the investment will be in lieu of 10-20 % stake. According to ET, this is not the first private equity infusion for the company. Intel Capital invested about $10 million in it in 2008, while Bennett, Coleman & Co Ltd pumped in close to $3.5 million in 2007.
Indianmart.com offers a platform & tools to over 1 million suppliers to generate business leads from over 5 million buyers, who use the platform to find reliable & competitive suppliers. The company has over 4000 employees located across 75 offices in the country.
IndiaMART Founder and CEO Dinesh Agarwal confirmed that the company indeed plans to raise capital but added that neither the exact amount nor the quantum of stake has been finalized, said ET.
Agarwal said the majority of the funds raised will be used for sales and marketing activities, while a portion will also be invested in technology. Another part of the capital will be set aside for inorganic growth, reported ET.
The Economic Times reiterated that as one of the first e-commerce sites in the country, IndiaMART was set up in 1996 to connect global buyers with suppliers and help them trade with each other on a common platform. The company claims to have over 2 million registered buyers and suppliers of which around half a million actively display and supply products.
The company follows a lead generation business model. India-MART earns revenues from subscriptions for the listings and for premium listing services. The company is also experimenting with providing advertising space for corporates targeting small and medium businesses, indicated the ET report.
The company, which earned approximately $25 million in 2010-11, is looking at doubling its revenues for 2011-12.
The fast growing e-commerce segment has been attracting significant investor interest over the past few months. In April this year, SAIF Partners pumped in $4 million in online kids and baby care product retailer, FirstCry.com, a Pune-based start-up, reported ET.
IndiaMART.com offers products that enable small & medium size businesses generate business leads (online catalogs/store-fronts), establish their credibility (third party verified trust profile) and use business information (finance, news, trade shows, tenders) for their business promotion.
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