Southeast Asian e-commerce platform Qoo10 has acquired Gurgaon-based online marketplace ShopClues, ending all speculation over the latter’s future.
According to a statement issued by ShopClues, the merger has been approved by the board of directors and major shareholders of both the companies.
Even as the deal size has not been disclosed, a source close to the development told DealStreetAsia that it could be around $70 million.
However, this could not be independently verified as attempts to reach out to ShopClues CEO Sanjay Sethi failed. He did not revert to our calls or respond to our messages seeking comments on the story.
ShopClues has been on the block for quite some time now. In fact, a few months ago, news had been rife about it being merged with bigger rival Snapdeal that would help both the e-commerce firms ramp up their operations in tier tier-II and III cities across the country.
The development had particularly gathered steam after merger talks between Snapdeal and Flipkart failed in 2016 over valuation issues. Snapdeal had, in fact, initiated talks with Shopclues thereafter to find a stable ground – that was a part of its 2.0 strategy to rebuild its business.
ShopClues was launched in 2011 when the e-commerce buzz was just beginning to gain momentum in India. The company had grabbed all headlines when it attained the unicorn status in January 2016 after it raised $100 million from investors such as sovereign wealth fund GIC Pte Ltd, Tiger Global and Nexus Venture Partners.
Other backers of the company include Helion Ventures and Innoven Capital, among others.
It is understood that all the investors had to take a haircut in the current transaction as the deal size did not have much to offer anyone.
Interestingly, ShopClues had started via Facebook with a team size of five but over the years, it seemed to lose the plot somewhere. Today, it is mired in controversies with its attempt to raise follow-on capital failing, resulting in a spate of layoffs.
ShopClues has reportedly retrenched over 500 people over the past few years.
Currently, it claims to have a headcount of over 700 people and caters primarily to buyers and sellers in tier 2, 3 & 4 cities and beyond.
ShopClues also operates Smartship and Momoe as enterprise services and Ezonow as a social commerce platform.
According to a separate report by the Economic Times, the acquisition by Qoo10 will also give it access to Momoe.
Qoo10 is one of the leading e-commerce platforms in Southeast Asia, which services SMEs via its localized online marketplaces in Singapore, Indonesia, Malaysia, China, Hong Kong.
Going forward, the company is understood to have plans to expand into other Asian countries.
“This partnership presents new strategic opportunities for both companies, as it opens up cross border opportunities for consumers and sellers across Asia,” the statement highlighted.
