Gurgaon based ecommerce company Yebhi has raised $12 million from its existing investors Fidelity Growth Partners India, Qualcomm Ventures, Nexus Venture Partners and Catamaran.
The round seems to be a bridge round as the company has been unable to raise follow on capital from new investors. Speaking to NextBigWhat, Manmohan Agarwal the founder of Yebhi confirmed the investment. He however declined to reveal the exact amount of capital the company raised.
“This is internal round for us and I can’t reveal the figure but it is lesser than previous round,” said Agarwal.
With this round Yebhi has raised a total of around $39 million of investment in four rounds. The company also switched to managed marketplace model like rivals ShopClues and Pepperfry. “We have been evangelizing managed marketplace model from quite some time and will continue doing so,” added Agarwal.
With the Government of India prohibiting foreign direct investment in inventory led e-commerce companies, the move to create a marketplace model- where the company acts as an intermediary between buyers and seller and not as sellers themselves- makes it easier for foreign investors to justify their investment.
Moreover, the inventory based model is also a more expensive way of doing things.
When asked about reasons behind moving from an inventory led model to the marketplace model, Agarwal said: “It offers more product assortments (options) for consumers and helps ecommerce players like us to have better unit economics.” Better unit economics, i.e. making profits on a unit level, is the holy grail the nascent e-commerce industry in India is chasing.
Like most of the other ecommerce players, Yebhi started as a niche play (only shoes) and gradually forayed into other categories such as electronics, lifestyle home decor and recently added prepaid mobile recharge.
Besides this internal round Yebhi is also looking to raise more growth capital. “If we see some investor’s interest in us, we would certainly like to evaluate it,” added Agarwal
Earlier in July Yebhi raised $20 million Series C funding led by Fidelity Growth Partners India (FGPI) and Qualcomm Ventures (QV). The company had also raised Series A funding of $2million from Nexus Venture Partners in 2010. In 2011 it raised Series B funding which was led by Catamaran Fund and Nexus Venture Partners.