Reliance Retail Makes Yet Another Acquisition; Buys Majority Stake in Urban Ladder for ₹182.12 Cr
- This acquisition strengthens the reliance’s position in the e-commerce industry providing tough competition to its peers.
- The development comes at a time when the e-commerce industry is reviving after a huge blow from Covid-induced lockdown.
Reliance Retail Ventures Limited (RRVL) has acquired a majority stake in online furniture startup Urban Ladder Home Decor Solutions Pvt Ltd for a cash consideration of Rs 182.12 Crore.
RRVL, a subsidiary of Reliance Industries Ltd (RIL), has bought 96% holding in the equity share capital of Urban Ladder and has a further option of acquiring the balance stake, taking its shareholding to 100%, according to the company’s disclosure to stock exchanges.
“RRVL proposes to make a further investment of up to Rs 75 crore. The further investment is expected to be completed by December 2023,” the company added.
This investment will further enable the group’s digital and new commerce initiatives and widen the bouquet of consumer products provided by the group.
UrbanLadder`s audited turnover was ₹434 crore, ₹151.22 Crore, and ₹50.61 Crore, and Net Profit/Loss of ₹49.41 Crore, ₹118.66 Crore and ₹457.97 Crore in FY 2019, FY 2018, and FY 2017 respectively, according to the stock exchange filing.
The online furniture retailer was valued at around Rs 1,200 Crore in 2018, which dropped to around ₹750 Crore in 2019.
Though the company raised more than Rs 700 Crore from top venture capital funds such as Sequoia Capital, SAIF Partners, Kalaari Capital, and hedge fund Steadview Capital in the last few years, but the company has struggled to raise capital since 2 years ago.
However, last November, it raised Rs 15 crore, though some of its existing investors did not participate in the round.
No governmental or regulatory approvals were required for the aforesaid investment. The investment does not fall within related party transactions and none of RIL’s promoter/promoter group/group companies have any interest in the transaction.
RRVL aims to expand its footprint in the digital space through acquisitions in order to take on Amazon and Walmart-owned Flipkart as the battle for Indian retail space heats up.
Earlier also, it was reported that the billionaire Mukesh Ambani-led RIL may buy milk delivery platform Milkbasket after buying stakes in online pharmacist NetMeds for Rs 620 Crore and online lingerie retailer Zivame.
About the company: Founded by Ashish Goel and Rajiv Srivatsa, UrbanLadder was incorporated in India on February 17, 2012. UrbanLadder is in the business of operating a digital platform for home furniture and decor products.