Homeshop18 raises $30mn fresh capital from Asian Hedge fund & Parent Network18

Homeshop18HomeShop18, the online and tele-shopping arm of Network18 has raised $30 mn from Asian hedge fund OCP Asia Limited and Network18, valuing the company at $330 mn, the company said on Thursday.

OCP Asia will invest $15 mn into the company, matched by an equal contribution from Network18 which will remain a majority shareholder in the company with over 51% stake.
With this round HomeShop18 has raised a total of $93 million in four rounds. The Noida based company had earlier raised $18.5 million in 2009 from South Korean retailing giant GS Home Shopping. Later in 2011, HomeShop18 secured $23.5 million from existing investors SAIF Partners, Network18 and GS Shopping.

The retailer has been trying to raise growth capital and was reportedly gearing up for an IPO. Earlier, Nextbigwhat had written on the company’s move to file for a confidential IPO at the Nasdaq. However, there seems to have been no progress on the that front for now.

The business, which started out as a home shopping television channel in 2008 diversified into e-commerce business as online retailing began to pick up in the country. The company said in statement that it has a portfolio of over 12 million units across different product categories in 3000 locations across the country.

The company also said that its revenues have doubled over the last year.

Homeshop18 faces competition from STAR CJ Network India, a 50:50 joint venture between News Corp owned STAR India and another Korean company, CJ Home Shopping and Naaptol. Besides, ecommerce companies like Flipkart and Myntra are also competing for a share of the retail pie.

The $10 bn Indian e-commerce industry is going through a phase of consolidation with weaker players getting acquired (sometimes forced into) or merging to form stronger entities. The cash starved industry has a high burn rate and regulatory uncertainties on foreign direct investment in e-commerce has made investors wary. However, differentiated e-commerce players as well as some of them who have already attained scale have been successful in raising funds recently. Further consolidation is likely to play out this year. This also means that the deep discounts will disappear.

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