ShopClues.com, which has been struggling amidst the massive ecommerce fight between Amazon and Flipkart, has managed to raise a small $1 million funding from Unilazer Ventures. Unilazer is a fund managed by Ronnie Screwvala. It’s a bridge funding round and ShopClues is understood to have obtained 1027 equity shares from its US parent Clues Network Inc to be allotted to Unilazer, against this funding.
This bridge funds comes at a time when the ecommerce major is facing a cash-crunch, though it has not admitted so much. Tiger Global, Nexus Venture Partners and GIC are the notable investors in ShopClues.
It is being rumored that ShopClues is simultaneously working on exploring the possibility of merging its operations with some other synergistic operator. There is no official confirmation from ShopClues on this yet.
These are tough times for startups in the online retail space since the top 2 appear to be way ahead and while Amazon is digging deep into its overflowing money-chest to fund the Indian venture, Flipkart is also capitalizing on its position vis-à-vis Amazon India and is being wooed by the biggest names in the business, including Walmart. For any third entity to match these 2, it would be a very expensive exercise, in terms of marketing spends and offering massive discounts.
Possibly, ShopClues is aware of this situation and has already reworked its plans for the country. They have basically truncated the business model and limited the product lines to fashion, mobile, and electronics accessories and home & kitchen products. This would leave them with the requirement for a more compact back-end operation and infrastructure and may even work well in developing a loyal customer base if they service them well. Spreading their feet too far and wide and being unable to stand could have proved disastrous.