Reliance retail industries acquired 96% of the Urban ladder a Bangalore-based online furniture retailer for Rs.182 crore in a distress sale.
Asia’s richest man, Mukesh Ambani owning company Reliance retail has acquired a 96% stake in online furniture retailer Urban Ladder for Rs.182 crore ($24.4 Million). Reliance industries aim to expand their presence in the online market in India. This acquisition is made on behalf of strengthening the Reliance industries e-commerce platform, Jio Mart. Reliance is seen as an emerging threat to US giant companies like Walmart’s Flipkart and World’s richest man’s company Amazon.
Many investment firms like Sequoia Capital, Steadview Capital, Kaalari Capital, and Elevation capital have been only able to recover a fifth of their investment made in Urban Ladder.
Ashish Goel and Rajiv Srivatsa, has founded Urban Ladder in 2012. The online furniture retailer company has raised about Rs.860 crore ($115 Million) in venture funding and it was valued at over Rs.1200 crore ($160 Million). The Reliance industries stated that it intends to invest further Rs.750 Million by December 2023 which the shareholding in the company will take to 100%.
The company starts facing difficulty when giants of online platforms enter the market. Urban Ladder was once viewed as a top vertical e-commerce site. But Urban Ladder faces deep competition in recent years when large companies like Amazon and Walmart’s Flipkart and with the entry of global furniture brand IKEA.
In October 2019, the co-founder Rajiv Srivatsa left the company. The startup company tried to stay in the competitive market by cut shotting the cost. Laid off the forth of their workforce, and shut down high-cost initiatives like cash on delivery (COD) and operations of several cities, CEO Ashish Goel said to Economic Times.
Reliance Industries recently announced that they are going to invest $50 Million in the next eight to ten years in Breakthrough Energy Ventures, a climate change company owned by Microsoft co-founder Bill Gates.
Reliance Industries has achieved the first cross-border deal of the year with Facebook for a 9.99% equity stake in Jio for Rs.43,574 crore. Reliance industries announce that the Public Investment Fund (PIF) of Saudi Arabia will invest Rs.9555 crore for an equity stake of 2.04% in Reliance Retail.