Senco Gold, a listed jewellery retailer, is reportedly in talks to acquire the struggling online jewellery brand Melorra for INR 40 crore to INR 50 crore.
Valuation͏͏ and͏͏ Due͏͏ Diligence͏͏ Ongoing:
According͏͏ to͏͏ sources͏͏ cited͏͏ by͏͏ Livemint,͏͏ the͏͏ valuation͏͏ is͏͏ yet͏͏ to͏͏ be͏͏ determined,͏͏ and͏͏ the͏͏ deal͏͏ size͏͏ could͏͏ fluctuate.͏͏ Another͏͏ source͏͏ reportedly͏͏ indicated͏͏ that͏͏ due͏͏ diligence͏͏ is͏͏ ongoing,͏͏ and͏͏ the͏͏ transaction͏͏ will͏͏ move͏͏ forward͏͏ once͏͏ the͏͏ process͏͏ is͏͏ “satisfactorily͏͏ completed.”
The͏͏ report͏͏ mentions͏͏ that͏͏ Melorra͏͏ has͏͏ been͏͏ in͏͏ talks͏͏ with͏͏ multiple͏͏ potential͏͏ buyers͏͏ over͏͏ the͏͏ past͏͏ few͏͏ months͏͏ for͏͏ a͏͏ potential͏͏ acquisition.
The͏͏ acquisition,͏͏ meanwhile,͏͏ will͏͏ strengthen͏͏ the͏͏ Kolkata-based͏͏ jewellery͏͏ retailer’s͏͏ presence͏͏ in͏͏ the͏͏ ecommerce͏͏ space.
Melorra’s͏͏ Business͏͏ Model͏͏ and͏͏ Expansion:
Founded͏͏ in͏͏ 2016͏͏ by͏͏ Saroja͏͏ Yeramilli,͏͏ Melorra͏͏ offers͏͏ lightweight͏͏ and͏͏ trendy͏͏ gold͏͏ and͏͏ diamond͏͏ jewellery͏͏ through͏͏ its͏͏ online͏͏ platform.͏͏ The͏͏ company͏͏ asserts͏͏ that͏͏ it͏͏ delivers͏͏ products͏͏ not͏͏ only͏͏ in͏͏ India͏͏ but͏͏ also͏͏ to͏͏ the͏͏ US,͏͏ UK,͏͏ Europe,͏͏ and͏͏ the͏͏ UAE.
With͏͏ backing͏͏ from͏͏ investors͏͏ like͏͏ Lightbox,͏͏ Norwest͏͏ Ventures,͏͏ 100Unicorns,͏͏ and͏͏ Value͏͏ Quest,͏͏ Melorra͏͏ has͏͏ secured͏͏ more͏͏ than͏͏ $88͏͏ million͏͏ in͏͏ funding͏͏ to͏͏ date.͏͏ However,͏͏ despite͏͏ this͏͏ significant͏͏ financial͏͏ support,͏͏ the͏͏ company͏͏ continues͏͏ to͏͏ operate͏͏ at͏͏ a͏͏ loss.
Surge͏͏ in͏͏ Losses͏͏ Amidst͏͏ Revenue͏͏ Growth:
The͏͏ Bengaluru-based͏͏ startup͏͏ reported͏͏ a͏͏ 73%͏͏ increase͏͏ in͏͏ losses,͏͏ reaching͏͏ INR͏͏ 106.7͏͏ crore͏͏ in͏͏ FY22,͏͏ up͏͏ from͏͏ INR͏͏ 61.4͏͏ crore͏͏ in͏͏ FY21.͏͏ Simultaneously,͏͏ sales͏͏ surged͏͏ by͏͏ 363.6%,͏͏ climbing͏͏ to͏͏ INR͏͏ 364.4͏͏ crore͏͏ in͏͏ FY22͏͏ from͏͏ INR͏͏ 78.6͏͏ crore͏͏ in͏͏ FY21.
The͏͏ company͏͏ has͏͏ not͏͏ yet͏͏ submitted͏͏ its͏͏ financial͏͏ statements͏͏ for͏͏ FY23͏͏ and͏͏ FY24.͏͏ Due͏͏ to͏͏ a͏͏ funding͏͏ crunch,͏͏ it͏͏ reportedly͏͏ raised͏͏ a͏͏ bridge͏͏ round͏͏ of͏͏ $1.1͏͏ million͏͏ from͏͏ existing͏͏ investors͏͏ in͏͏ June͏͏ this͏͏ year,͏͏ at͏͏ just͏͏ one-tenth͏͏ of͏͏ its͏͏ previous͏͏ valuation.
The͏͏ company͏͏ was͏͏ valued͏͏ at͏͏ an͏͏ estimated͏͏ $120͏͏ million͏͏ during͏͏ its͏͏ last͏͏ funding͏͏ round͏͏ in͏͏ 2021.͏͏ Furthermore,͏͏ there͏͏ have͏͏ been͏͏ reports͏͏ that͏͏ it͏͏ has͏͏ stopped͏͏ paying͏͏ salaries͏͏ to͏͏ its͏͏ employees.
Continue͏͏ Exploring:͏͏ Senco Gold expects͏͏ 12%͏͏ revenue͏͏ growth͏͏ this͏͏ festive͏͏ season
Competitive͏͏ Landscape͏͏ in͏͏ Online Jewellery:
It͏͏ competes͏͏ with͏͏ Tata-owned͏͏ CaratLane͏͏ and͏͏ BlueStone͏͏ in͏͏ the͏͏ Indian͏͏ online͏͏ jewellery͏͏ market.͏͏ The͏͏ report͏͏ of͏͏ potential͏͏ funding͏͏ comes͏͏ at͏͏ a͏͏ time͏͏ when͏͏ many͏͏ of͏͏ Melorra’s͏͏ competitors͏͏ have͏͏ outpaced͏͏ it.͏͏ In͏͏ August͏͏ 2023,͏͏ Tata-owned͏͏ Titan͏͏ acquired͏͏ an͏͏ additional͏͏ 27.18%͏͏ stake͏͏ in͏͏ CaratLane͏͏ for͏͏ INR͏͏ 4,621͏͏ crore͏͏ at͏͏ a͏͏ valuation͏͏ of͏͏ nearly͏͏ INR͏͏ 17,000͏͏ crore,͏͏ providing͏͏ substantial͏͏ exits͏͏ for͏͏ its͏͏ co-founder.
In͏͏ the͏͏ meantime,͏͏ BlueStone͏͏ is͏͏ making͏͏ plans͏͏ to͏͏ list͏͏ on͏͏ the͏͏ stock͏͏ exchanges͏͏ and͏͏ secured͏͏ INR͏͏ 920͏͏ crore͏͏ in͏͏ a͏͏ pre-IPO͏͏ round͏͏ earlier͏͏ this͏͏ year͏͏ from͏͏ investors͏͏ like͏͏ Peak͏͏ XV͏͏ and͏͏ Prosus.͏͏ Last͏͏ month,͏͏ Giva͏͏ raised͏͏ INR͏͏ 100͏͏ crore͏͏ in͏͏ an͏͏ extended͏͏ Series͏͏ B͏͏ round͏͏ led͏͏ by͏͏ Premji͏͏ Invest.
