While the majority of celebrity-centred fashions brands have been unable to scale, Hrithik Roshan’s HRX and Virat Kohli’s Wrogn are exceptions. And, Flipkart has now become a common investor directly or indirectly in both successful brands.
Myntra which is fully owned by Flipkart had acquired a majority stake in HRX in 2016 and the e-commerce giant today announced its strategic investment in Universal Sportsbiz Pvt Ltd or USPL. USPL has built a portfolio of youth-focused fashion brands including Virat Kohli’s Wrogn, Kareena Kapoor Khan’s IMARA, Kriti Sanon’s Ms Taken and Ranbir Kapoor’s SINGLE.
According to a company’s press statement, Flipkart has invested an undisclosed amount in the eight years old fashion brand’s Series F round. Following the investment, the Flipkart Group will work closely with the USPL team to deepen product offerings on its platforms. The Series F round also saw participation from existing investor Accel Partners.
The firm has been amongst the leading brands on Myntra over the last few years. On the online front, USPL’s products are primarily distributed through Flipkart and Myntra besides its own website. USPL is also present in over 750 offline retail outlets in more than 100 cities across India.
While the details of Series F round couldn’t be ascertained, USPL had earlier raised Rs 11.3 crore from Accel and N B Ventures in Series E round in May 2020 at an estimated valuation of Rs 1,250 crore.
After allocation of shares in Series E round, Accel stood out as the biggest shareholder in the company, controlling 51.38% stake. Founder of the company Anjana Reddy controls 19.55% whereas Sachin Tendulkar holds a 6.14% stake in the company. NB Ventures and Alteria capital held 4.49 and 1.03% stake respectively and ESOPs make up nearly 3.72%.
Right before Flipkart’s announcement, board at USPL had passed a special resolution to allot 3046 partly paid equity shares to Virat Kohli and his Talent Management firm Cornerstone Sports. Post allotment of these shares, Virat Kohli will likely be the second-largest individual shareholder in USPL with 8.53% stake and Cornerstone will hold a 3.46% stake.
Importantly, all stakeholders will dilute their holding when Flipkart would be allotted shares for Series F round
USPL has also improved its financial in the fiscal year ending on March 31, 2020, with a 64.5% jump in total income, which increased to Rs 243 crore in FY20 from Rs 147.7 crore in the previous fiscal. The company has also recorded a 48.4% surge in total expenditure which grew from Rs 182.6 crore in FY19 to Rs 271 crore in FY20. The company has managed to control its losses from Rs 41.11 crore in FY 19 to Rs 34.65 crore in FY20.
Flipkart Group, which dominates over 60% share in the online fashion market, has been ramping up its presence in the fashion segment. This is the third bet by Flipkart in fashion in 2020. Last month, it had invested Rs 1,500 crore in Aditya Birla Fashion and Retail or ABFRL for a minority stake of 7.8%. In July, the company also invested Rs 260 crore in Arvind Fashion Limited for a minority stake.