With $50M funding and partnership with Paytm, Zovi founders set to launch app only marketplace for deals
Zovi founders Manish Chopra and Satish Mani today announced that they have raised USD 50 Million. They plan to diversify into Online to Offline (O2O) market with the launch of app only consumer lifestyle deals marketplace Little. The Indian O2O market expected to be worth USD 64 Billion by 2016 and Little wants to make the most out of it. Started as an affordable fashion brand in 2010, Zovi started selling international in September 2014. The company went through a management reshuffle in 2012 when Manish was roped in as CEO. The company acquired Inkfruit in 2013 and had raised $25M before this round.
After this deal, Manish and Satish will continue to build Zovi as a fashion brand with focus on men’s fashion. Zovi will be marketed on popular online market places and at Zovi.com.
The $50M funding round
The $50M funding is led by Paytm along with a large new undisclosed investor and participation from existing investors SAIF Partners and Tiger Global Management. According to the company, the funds will be deployed for following:
1. To build a massive merchant ecosystem in the country.
2. Hire senior level talent.
3. Build new technology to focus on O2O space.
Little is building the O2O supply side infrastructure and plans to offer 50,000+ live deals across 11 cities by March 2016. Zovi is 400 people strong including technology, product and operations team and expects to build a 1000 member team by March 2016.
Big dreams of the 'Little' app
The ‘Little’ app aims to be both a discovery platform for lifestyle consumers and a significant sales channel for merchants. It'll provide the supply of real-time hyper-local deals to customers across services like, restaurants, movies, hotels, salons, gyms, spas and other services while creating a hassle free, just in time platform for merchants to market their services. With the close partnership with Paytm, Little will power the deals platform on Paytm and enable payments when a customer bags a deal. Little has already enrolled over 5,000 merchants in 11 cities across India and expects to hit a GMV run rate of $170 million, by March 2016.
Manish Chopra, CEO & Co-Founder of Little believes that the deals space is broken in India with little focus on personalization, timeliness and ease of redemption. He wants the merchants to see Little as their ‘sales partner’ for enabling them to get profits from selling their services. Little will act as a personalised sales platform for merchants where they can gain intelligence about customers in the vicinity, send timely notifications and offer relevant deals in a matter of seconds.
SAIF Partners see enormous potential for O2O in India with the explosive smartphone growth and believe in the technology and business acumen of Little team which was first incubated with them more than 4 years ago.
The Paytm dominance
Little will give the access of hyper local deals to Paytm consumers as well. The investment in Little will help Paytm to get strong ground in the hyperlocal space which is already a high priority for Paytm given its Alibaba backing. The Noida-based company had started boarding kirana stores earlier this year in Bengaluru and invested in Chandigarh based Jugnoo. Little will be both discovery and deal hunting platform for smartphone users while Jugnoo ensures last mile hyperlocal delivery. With both startups as partners(and investees), Paytm will have more control over entire value chain (discovery to delivery).
With the announcement, it remains unclear if any part of the fund will be deployed for Zovi as well. Building a brand through online channel has not been an easy exercise in India. Key players in space including Zovi are not seeing growth as branded and hyperlocal marketplaces. Recently, Yebhi co-founder Danish Ahmad quit the company to launch Shopsity, an anti-ecommerce venture bringing together offline shopping and online discovery.
Little will be taking on Groupon, MyDala and Coupondunia amongst others in the deals space. Though some experts believe that the time for deal plays are gone, it will be interesting to see how the hyperlocal deal space evolve in future.
(with inputs from Jai Vardhan)