V-Mart Retail, a leading fashion retailer, has signed a definitive agreement to acquire online fashion marketplace LimeRoad at a lumpsum amount of Rs 31.12 crore. The acquisition will help V-Mart to expand its presence in omnichannel value fashion retail.
V-Mart is also “acquiring assets worth Rs 14.61 crore and assuming current liabilities of Rs. 36.26 crore”, which shall be subject to adjustments as mutually agreed between them.
This is a distress sale as LimeRoad has raised over US $ 50 million from investors such as Tiger Global, Matrix Venture Partners, Lightspeed among others.
Given the underlying strong unit economics post marketing, V-Mart plans to invest a total of Rs. 150 crore to enable LimeRoad to scale and achieve sustained profitability.
Lalit Agarwal, MD, V-Mart Retail said that with this acquisition, the company aims to not only acquire digital-first millennials but build its omnichannel expertise. V-Mart will operate LimeRoad as an independent business unit, retaining its tech start-up culture.
Suchi Mukherjee, Founder, LimeRoad will join V-Mart’s leadership team as CEO of LimeRoad and the omnichannel business whereas Ankush Mehra, Co-founder of LimeRoad continues as COO.
It has been said that as LimeRoad has been struggling to raise new money for the past couple of years, the acquisition appears to be a good deal for this marketplace. LimeRoad’s struggle is evident from its shrinking scale which dwindled to 13 per cent to Rs 69.31 crore in FY ’22 from Rs 79.64 crore in FY ’21. Its overall revenue was Rs. 179.95 crore during FY ’20 and the same has been Rs 69.31 crore in FY ’22.
The women segment contributes almost 65 per cent of the LimeRoad business. It has a strong presence in the Rs. 500 to Rs. 1,000 value segment.
Two decades-old V-Mart has penetration in Tier-1,2,3,4 cities through a network of 410 stores. The Lalit Agarwal-led company operates a direct-to-customer (D2C) omnichannel platform vmartretail.com. In addition to this, it is also serving customers through its brick-and-mortar stores at multiple marketplaces.
Prior to LimeRoad, few other fashion e-commerce companies like Voonik, Zovi, YepMe and Koovs have also got acquired in distress sales.
