Acquisitions

Reliance Acquires Furniture Marketplace Urban Ladder in Distress Sale

After months of speculation, Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries, has finally acquired Urban Ladder.

Logo of online furniture marketplace Urban Ladder

RRVL has acquired 96% stake in the Bengaluru based online furniture marketplace for nearly INR 182 Crore.

However, this is a distress sale as INR 182 Crore, which is the actual acquisition price, is even way less than Rs 700 crore that startup had raised from various high profile investors over the years.

“Distress Sale is an act of selling something because business owners don’t have enough money to operate the business or service their debt. Distress Sale often results in heavy loss for business owners as well as investors.”    

Some of Urban Ladder’s investors included high profile names like Kalaari Capital, Saif Partners (now known as Elevation Capital), Sequoia Capital and Hedge Fund Steadview Capital.

Distress sale means that all the investors have taken a significant loss on their investment in the Bengaluru based startup.

According to the official press release, RRVL has proposed to invest INR 75 Crore over the next three years. Reliance also has the option of acquiring remaining stake (i.e. remaining 4% stake) in the company.

This is a second startup that Reliance has acquired in less than three months. In August, India’s largest private sector company had acquired e-pharmacy startup Netmeds for INR 620 Crore.

As it happened in e-pharmacy sector, Reliance’s entry in the online furniture marketplace is likely to trigger a consolidating in this nascent industry as well. Pepperfry is the current market leader of this highly nascent marketing.

Pepperfry had raised whopping $40 Mn in series F round in January this year. What helped Pepperfry to sustain itself in a highly nascent market while Urban Ladder went completely bust.

Well, the startup community and enthusiasts on Twitter came up with their expert views as what really led to Urban Ladder’s collapse. We’ve picked up some of the best Twitter reactions. Do check out these reactions at end of this article.

However, if one were to take an holistic view then Urban Ladder’s struggle seems to have started following its series E round in 2017. Since then the Bengaluru headquartered company has been struggling to raise funds from investors, while its valuation also has been taking a big hit.

From its eye popping valuation of Rs 1,200 crore in 2018, its valuation dropped to Rs 750 crore in 2019 and finally it crashed below INR 200 crore.

By the way, Mukesh Ambani promoted company has been steadily increasing its presence in India’s startup industry. Just to add up here, Reliance recently ha also picked up substantial stake in online Lingere startup Zivame.

In September, Techpluto had exclusively reported about Bollywood Superstar Amir Khan’s maiden investment in Zivame.

To read more about Amir Khan’s investment in Zivame, please click here.

Here is how Twitter reacted to Urban Ladder’s distress sale to Reliance. 

 

 

 

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