The unraveling of India’s ShopClues: From unicorn to also-ran

Sanjay Sethi and Radhika Aggarwal, founders of ShopClues. Photo: Sneha Srivastava/Mint

In January 2016, ShopClues became India’s fourth unicorn firm valued over a billion dollars at $1.1 billion. It was no mean feat at a time when Unicorns were rare unlike present day when there are more than 30 such startups that enjoy a billion dollar plus valuation, nearly a third added in 2019 alone. But in a little less than four years, it has gone from an early unicorn to outcast, having held merger discussions with every e-commerce firm in the country and outside, finally selling the business at a 90% discount to its peak valuation. As per the details of the transaction which became known Thursday evening, ShopClues will merge with Singapore’s online retailer Qoo10 Pte. Ltd in an all stock deal. While the deal still hasn’t closed, with documentation and board approval pending, it appears that ShopClues will fetch a valuation of $80 million, said two people close to the company, requesting anonymity.

So what led to the steep fall? According to industry watchers, while the ShopClues business model was smaller and less capital-intensive than bigger rivals such as Flipkart, Amazon and Snapdeal, it still had a significant cash burn and was simply unable to raise further funding after its $100 million round in 2016, which was led by Tiger Global and Singapore’s sovereign wealth fund GIC.

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