Finally, ShopClues has found a buyer. The company has been acquired by Singapore-based e-commerce marketplace Qoo10 in about $70-100 million all-stock deal. It’s not known how the Tiger Global-backed company will offer value to Qoo10.
With ShopClues in its portfolio, Qoo10 may enter already overcrowded Indian e-commerce space. Qoo10 operates a localised marketplace in Singapore, Indonesia, Malaysia, China, Hong Kong.
ShopClues has been looking for a buyer for about the last six months. It tried to clinch a deal with Snapdeal. However, the Kunal Bahl-led ventured had turned down the offer because of its outstanding liabilities, a sharp decline in scale, among other reasons.
According to an ET report, Qoo10 will also acquire Momoe as a part of the deal. ShopClues had acquired the Bengaluru-based payments firm in about $12 million in 2016.
Since the beginning of the current fiscal, ShopClues has been mired with several problems including shrinking scale, inability to raise follow-on capital and several rounds of layoffs. The firm had fired over 500 people across several tranches.
Moreover, its social commerce platform EzoNow is also struggling amid well funded social commerce focused companies.
ShopClues’ investors also looked for a merger with CraftsVilla, Limeroad and a few others. However, none had shown an appetite to absorb the large quantum of losses and its liabilities.
Since Snapdeal didn’t agree to acquire Sanjay Sethi-led company in less than $50 million, it’s very unlikely that an offshore e-commerce firm will shell out $70-100 million for acquiring a struggling Unicorn.
Importantly, the transaction would hardly offer anything to anyone- investors, founders or employees (ESOP holders).
The company was also under the Enforcement Directorate (ED) scanner for funds it received from the US-based holding entity – Clues Network. Entrackr had exclusively reported about it in August.
ShopClues has certainly avoided collapse through this deal. It’s worth noting that the company has been acquired in less capital it raised across several institutional rounds. It’s one of the rarest instances where a Unicorn has fallen like this. It used to be referred to as one of the dark horses in Indian e-commerce parlance.