Indiamart Intermesh Ltd, owner of the Indian online B2B market place, Indiamart.com, has plans to raise US$20 million of capital from private equity investors. Reports in the Indian press suggest that PE firms Bessemer Venture Partners and Warburg Pincus will be involved in the fund raising. Indiamart CEO and founder Dinesh Aggarwal declined to comment on the reports.
If this round of fund-raising goes ahead, this will be the third time the privately-held company has raised capital from outside investors. Indiamart raised US$10.8 million in 2008 from Intel Capital India Technology Fund in exchange for a 14% stake in the company – valuing the company at that time at approximately US$77 million. Similarly in 2007, US$3.4 million was raised from Brand Equity Treaty Ltd (Times Private Treaties) for about a 5% stake in the B2B platform valuing Indiamart at roughly US$68 million.
The Indiamart portfolio of businesses consists of the online B2B platform Indiamart.com, Indiamart Sourcing guides, international trade shows and internet promotion services. The company states that it has been growing at a CAGR of 60% and doubled its staff (to an unspecified number) after the Intel Capital fund raising in 2008.
Management plans to allocate the new funds to support customer acquisition and marketing activities and R&D development. Indiamart claims to have participated in over 100 international and 200 domestic trade shows in 2009 to promote its online platform. Indiamart claims to have 700,000 products and 300,000 suppliers listed on its platform. It has 32 offices across India. BSG’s October edition of the B2B Online Media Report ranked Indiamart 4th out of all B2B websites in Asia (based on Alexa.com traffic data), behind Alibaba.com, HC360.com, and Made-in-China.com.
Indiamart views Alibaba.com and Global Sources as its key competitors in the Indian market and both of those companies have put significant emphasis on the Indian market in recent years. Global Sources has increased its presence in India now with a significant sales team in place and the Hong kong-based company also organises a number of exhibitions and "Private Sourcing Events" there. Alibaba.com has partnered with local B2B media firm Informedia18 and now claims to have more than 1.45 million registered users in India. With so much attention on the Indian market from the key B2B online platforms, it will be worth watching Indiamart to see if their strategy is to actually compete or to be acquired.
1 comment:
The growth of these companies and their expansion into India really demonstrates how the Indian economy is developing. With three strong competitors seeking B2B business in India, it will be interesting to see what types of tactics will be needed for one to significantly stand out among the others.
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