Beleaguered e-commerce venture ShopClues has found a buyer at last, but at a highly reduced valuation of less than $100 million. The investor is Singapore-based e-commerce company Qoo10 and it would be an all-stock deal, reports Economic Times. A number of key investors who had bet on ShopClues will stand to lose heavily and write off their investments. They made these investments when ShopClues enjoyed a much higher valuation of $1.1 billion.
There were several attempts made by the promoters at ShopClues to sell the venture but did not succeed. The last known negotiation was with rival Snapdeal but fell through since Snapdeal said it realized during the due diligence exercise that the debts owed by ShopClues were much higher than it had assumed.
For Qoo10, which already has a presence in Singapore, Indonesia, Malaysia, China and Hong Kong, adding India with its vast potential will be of great advantage. There are doubts that ShopClues may lose its name as well, after the formalities are completed. ShopClues had a digital payment channel Momoe, which was part of the Clues Network. This will also be acquired as part of this transaction.
ShopClues counts among its investors, Tiger Global Management, Nexus Venture Partners, Helion Venture Partners and GIC, the Singapore Government-owned sovereign wealth fund, among others. As mentioned, most of these investors would have marked their investments in ShopClues as losses in their books.
Qoo10 has raised funds from Singapore Press Holdings, eBay, Saban Capital Group, UVM 2 Venture Investments, Brookside Capital and Oak Investment Partners.
Sandeep Agarwal, Radhika Agarwal and Sanjay Sethi founded ShoClues but the ecommerce platform is being currently managed by Radhika and Sanjay Sethi. Agarwal stepped down in 2015. Right through the liquidity crisis during the past few months the startup managed by infusing funds from its own parent unit registered in Singapore.
The company began with the right intentions and approach, but when giants like Amazon and Flipkart entered the scene it could not stand the onslaught.