Cbazaar for fundraising to drive growth

After raising $3.5 million from two venture capital firms in April last year, Chennai-based online retailer of Indian ethnic wear, Cbazaar, is planning second round of fundraising to drive expansion.

CEO and co-founder of Net Avenue Technologies Pvt Ltd that runs the portal, Rajesh Nahar, told Deccan Herald, “We have plans to go for Series B (second round of funding) in the next few months and working on a business plan for it.” He, however, declined to divulge the amount.

Nahar also said that Cbazaar is targeting revenues of $100 million by 2015-16 and hopes to break even by next fiscal. “We will increase our penetration in existing markets, especially the US and India, and also venture into ethnic accessories.”
Cbazaar raised $3.5 million from Ojas Venture Partners and Inventus Capital Partners.
The second round of funds being raised will be used to drive expansion; the first was invested in technology, infrastructure upgradation and brand-building activities.
Started in 2005 by Rajesh Nahar and Rajesh Katariya, Cbazaar sells a range of Indian ethnic wear to overseas customers, predominantly the non-resident Indian community, and South Asians spread across 120 countries.

The duo started business in 1998 with seed capital of Rs 12 lakh, launching Chennaibazaar.com and tried their luck at online selling. It turned out to be a first-mover disadvantage, as e-commerce was yet to take off in those days, prompting them to look overseas as Indians there were adapted to e-commerce and ready to transact online. “We enabled overseas Indians to send gifts to their friends and relatives residing in India. We were the first to sell sarees online. It was for $90 in 2000.”

In 2011, it forayed into the domestic market to tap the potential for ethnic apparel and accessories among affluent Indians. “We have seen the average ticket size growing from about Rs 1,500 to Rs 3,400 now,” said Nahar. He said that saree sales contribute about 50 per cent of Cbazaar’s revenues. The portal boasts of a portfolio of 16,000 products comprising women’s and menswear, kids clothing and adding about 150 new designs every day.

Consulting firm Technopak Advisors estimates the market size of sarees and ethnic wear at approximately Rs 45,000 crore by 2014, with major growth coming from the saree segment.