After multiple pivots, e-commerce firm Voonik has merged with Bangladesh-based startup ShopUp, as it was unable to find an attractive deal in the country. With this, Voonik becomes the second notable e-commerce firm to be consolidated with a relatively smaller foreign entity after ShopClues which recently merged with Singapore-based Qoo10.
Responding to Entrackr’s detailed questionnaire, Voonik’s CEO Sujayath Ali confirmed the development over email.
“Some news. Voonik is joining hands with ShopUp, a rocketship startup from Bangladesh. @hinava and I are joining as Cofounders – and we are incredibly excited about working with @Afeef_Zaman, @ataurRc and @SiffatSarwar to help build what will be Bangladesh’s first Unicorn,” tweeted Ali.
Voonik had been in talks with several e-commerce horizontal majors in hopes to be acquired, but the company saw more synergies with ShopUp, according to multiple people aware of the conversations.
“Since the company was not getting attractive deal in India, it decided to consolidate with ShopUp,” said one of the sources on condition of anonymity.
According to Ali, Voonik’s consumer facing business isn’t a part of the merger and it will continue to function in India under the leadership of Kiran Hiriyanna, founder of Schoolay. Hiriyanna was also a former employee of Voonik.
ShopUp is similar to Infibeam’s BuildaBazaar — a platform that helps businesses go online. It enables e-commerce, store, logistics, sourcing, marketing and working capital requirements.
While Entrackr couldn’t ascertain the contours of the transaction, it is a distress one, say sources. Voonik has raised around $27 million since its inception in 2013 from the likes of Sequoia Capital, Beenext, Bennos and several others.
Over its seven-year journey, the Bengaluru-based online fashion retailer made five pivots. Two years ago, it started exploring offline channels through franchise stores in tier II and III cities. However, it didn’t work out.
Over the past few years, several companies such as Roposo, Yepme, Zovi, and Freecultr could not succeed in making strong online-only brands. Collectively, these companies had raised close to $170 million. After the euphoria of about five years in the fashion e-commerce space, the sector has been experiencing an all-time low in the last four years.
Update: The story and headline have been updated after getting inputs from Voonik CEO.