Indonesia’s fashion e-commerce firm Berrybenka is engaged in early talks to acquire some assets and team resources of Sorabel that recently shut down its operations, three sources familiar with the matter told DealStreetAsia.
Berrybenka is one of the multiple parties in active discussions with Sorabel, which is seeking to sell parts of the business including its brands, the sources added.
When contacted, Sorabel (formerly Sale Stock) CFO Kevin Widlansky said, “There are many potential acquirers of Sale Stock’s assets, however, the final disposition of Sale Stock’s assets will be determined by the administrator per the laws and regulations of Indonesia. As such, we aren’t engaged in any such discussions.”
An industry source said the discussions are still at an early stage and nothing is finalised yet. The two parties haven’t reached an agreement yet, the source added.
Sorabel has appointed an advisor to help with the liquidation process, and the timeline of the acquisition will follow the advisory firm procedure, the source said. The exact timeline for this process could not be ascertained.
In a letter sent to its employees last month, Sorabel management said that the company will have to terminate employment contracts with no exception, effective July 30 due to the liquidation process.
In an interview with DealStreetAsia last month, Sorabel’s former CEO Jeffrey Yuwono and CFO Kevin Widlansky said the COVID-19 pandemic severely affected Sorabel’s business resulting in a drop in sales to the extent of 50 per cent in the first two quarters of the year. The firm also saw some investors pull a Series C term sheet at the last minute, cutting short its operational runway.
Sorabel tried to pivot by selling medical and fabric masks but the move could not offset the loss and keep the business afloat.
The firm last raised an undisclosed pre-Series C round from South Korean venture capital firms Ncore Ventures and Shift in August 2019. Its other existing investors include Gobi Partners, Openspace Ventures, Golden Equator Capital, SMDV, Alpha JWC, Convergence Ventures, Korea Investment Partners and MNC Media.
Boosted by high internet penetration and a 260-million-strong population, Indonesia has seen massive growth in online commerce. In 2018, Indonesian consumers spent $20.3 billion online, rose 20 per cent from $3.3 billion compared to 2017, according to a joint report by WeAreSocial, Hootsuite, and Statista. Consumers spent $9.5 billion on categories such as fashion, electronics, and groceries.
Established in 2011, Berrybenka curates female fashion clothing from local to international brands. The firm bagged an undisclosed Series C funding round from Asia Summit Capital, Maj Invest Equity, SoftBank-Indosat Fund. Its investors also include East Ventures, STRIVE and TransCosmos.
With the market dominated by horizontal e-commerce players such as Tokopedia, Bukalapak and Shopee, niche verticals like fashion e-commerce have struggled to survive.
More than 10 fashion-focused e-commerce startups have shut down their operations in recent years, according to DealStreetAsia data, leaving a handful of players including Berrybenka and deep-pocketed Zalora dominating the scene. Zalora, set up in 2012, is backed by Rocket Internet, Access Industries, TEV Ventures, and J.P. Morgan Asset Management.
