LimeRoad raised Rs 350 Cr in venture capital, now sold for one-tenth of that

LimeRoad, which was founded as a women’s fashion marketplace in 2012, before online shopping became mainstream in India, has been acquired by V-Mart in a distress sale. The value fashion retailer has shelled out a little over Rs 31 crore in an all-cash deal for the Tiger Global-backed startup. V-Mart will pour in an additional Rs 150 crore to expand its omnichannel presence via LimeRoad’s platform and its 1.7-crore customer base. 

The slump sale comes at a value that is less than one-tenth of the total funding raised by LimeRoad in 10 years of its existence. Besides Tiger Global, the erstwhile social shopping sensation was also backed by Matrix Partners India and Lightspeed Venture Partners, among others. In its glory days between 2012 and 2015, LimeRoad raised $50 million across three rounds, followed by a smaller infusion of $1.5 million in 2020 from undisclosed investors, according to Tracxn.

However, as larger online fashion marketplaces like Myntra, Ajio, and even Flipkart Fashion and Amazon Fashion took over, smaller, vertical-focused players like YepMe, Voonik, LimeRoad, koovs, and Jabong (acquired by Myntra in 2016) started losing out. As LimeRoad struggled with womenswear, it ventured unsuccessfully into menswear and kidswear, added non-fashion categories like home and kitchen utilities, and even opened physical experiential stores. But, its losses continued to balloon, revenues declined, and funding dried up. LimeRoad reported sales of Rs 69 crore in FY22, down over 61 per cent from FY20.

Following V-Mart’s acquisition, LimeRoad will continue to operate as an independent unit under the company such that its “startup culture” and is retained, V-Mart’s Retail Managing Director Lalit Agarwal said in a statement. “With this acquisition we aim to not only acquire digital-first millennials but build our omni-channel expertise,” he added.

V-Mart currently operates 410 value retail stores in 254 cities, and hopes to become an omni-channel player in the next two to three years. LimeRoad Co-founder and CEO Suchi Mukherjee will join V-Mart’s leadership team as the CEO of its omni-channel business, while its other co-founder Ankush Mehra will continue as the COO of LimeRoad.

“V-Mart is a leader in the price meets quality space. This partnership helps us fundamentally solve the quality conundrum at value prices online, and accelerate our vision of making the freshest of fashion accessible to our core customer through a uniquely rich online-offline experience,” Mukherjee said in a statement.

Online fashion is expected to become a $30 billion market in the next five years, and continues to be one of the largest categories of e-commerce.

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