Moglix, an ecommerce company specializing in B2B procurement of industrial products today announced that Mr. Ratan Tata, Chairman Emeritus at Tata Sons, had made an undisclosed financial investment in the startup. Moglix was founded in August 2015 by Rahul Garg, a former Google employee with experience in building global products and running sales across Asia.
Moglix currently specializes in B2B procurement, maintenance, repair and overhaul of industrial products such as fasteners and industrial electricals and is partnering with manufacturers and distributors across these categories in India, China and other Asian countries. The startup's end-to-end procurement marketplace is being built to provide product discovery, price negotiation, logistics, and payment/escrow capabilities.
Moglix had also recently raised a pre-Series A funding from Accel Partners and Jungle Ventures. The funds are being used to enhance the technology platform, build a deep supplier base as well as increase marketing spends across Asia.
As the Government is driving manufacturing growth in India through the Make in India and Digital India campaigns, Moglix aims to steer itself to build on those initiatives. The startup believes that while globally, top manufacturers have evolved towards adoption of technology for procurement and sales– Indian manufacturers have been slow to adopt technology, leading to process inefficiencies and limited marketing exposure. Talking about the fund raise, Rahul, CEO and Founder of Moglix, said,
We are pleased to have an icon of Indian manufacturing as our advisor. Mr. Tata’s contribution to the manufacturing sector has been inspirational and we look forward to his guidance. Moglix strongly believes that the unorganized supply chain in India can only be solved with a technology-1st mindset. We are confident that Mr. Tata’s role as an investor and mentor will help us gain a strong foothold in the sector and realize our vision. The Make in India program when combined with the digital initiatives in the country have great potential to play a transformative role in India’s manufacturing sector.
Moglix currently consists of a team of 60 and Rahul aims to expand to 100 in the next few months. Talking to YourStory, Rahul confirmed that since inception the startup has so far served customers across 1000 cities and towns, with healthy traction and interest coming from both metro cities and Tier 2 and 3 cities. Currently available only through a website, Moglix is in the process of developing a mobile app solution to cater to the growing demand of Indian mobile audience.
Ecommerce in India has gained mainstream popularity over the years with players like Flipkart, Snapdeal, Paytm and Shopclues driving large volume of orders and also raising large funding rounds to sustain growth. The Indian consumers too have gained confidence in making purchases online. With digital wallets and other safety mechanisms people are now opting for other payment methods instead of 'cash-on-delivery'.
Ecommerce still accounts for only around 2% of the total retail market in India, so there is immense potential for growth as more of the country gets access to internet services. There are many niche ecommerce markets too that the leading players haven't tapped into like luxury commerce and industrial goods.
The Ministry of MSME estimates that there are about 36 million small units in India providing employment to over 80 million persons. The sector through more than 6,000 products contributes about 8% to GDP besides 45% to the total manufacturing output. This sector has seen a lot of interest from entrepreneurs and investors in recent times. Power2SME recently raised a Series D funding from Nandan Nilekani and its existing investors. Industrybuying recently raised Rs 12 crore in debt financing from Trifecta Capital.
FDI is allowed in wholesale e-commerce in India. So player like Power2SME, Industrybuying, Amazon, Tolexo, Bizongo, Omnikart are all fairing well suggesting the scope of accommodating multiple players in the market. Rahul added that while FDI regulations for wholesale goods are a boon, the goods and services tax(GST) if implemented could have a more profound impact to boost this sector in India.
Over the past few years, Mr. Tata has added a diverse list of startups to his growing portfolio. He had previously invested in multiple ecommerce players like- Snapdeal, Paytm, Bluestone, CarDekho etc before investing in manufacturing tech-startup and B2B marketplace Moglix. Mr. Tata's expertise and interest in the sector will help Moglix boost their business growth and global expansion plans. Also with marquee investors such as Accel Partners and Jungle Ventures already on-board, Moglix led by an experienced team has the chance to help Indian SMEs flourish in India.
(Disclaimer: Ratan Tata is an investor in YourStory)