Palred Technologies, a public listed company on NSE and BSE that owns and operates LatestOne.com, which they claim is India’s first B2B e-tailer for mobile accessories, has raised Rs 22 crore through a preferential allotment of shares to a group of investors led and advised by Florintree.
The board of the Hyderabad-based company approved an allotment of Rs 22 crore at a price of Rs 145 per share, to Florintree-led and advised investors including Mathew Cyriac (former Co-Head of Blackstone India Private Equity Business), Chidambaram Palaniappan (Founder of Florintree), K Madhavan (Joint Managing Director of Star TV India) and Bharat Sheth (Managing Director of Great Eastern Shipping).
Palred is promoted by Palem Srikanth Reddy, an MS from Stanford University, USA, with over 25 years of experience with global technology and logistics companies including Hewlett-Packard and UPS. Palred (formerly known as Four Soft Limited) had sold its logistics software product business in 2014 to a portfolio company of Francisco Partners and distributed most of the proceeds to its shareholders for handsome returns. They retained a small portion of the proceeds to build LatestOne.com.
Currently, LatestOne.com holds an inventory of over 10,000 different products such as Bluetooth devices, mobile covers, tablet accessories, cables, power banks, Android TVs, headsets, smartwatches, and CCTVs and operates through its own fulfilment centres in New Delhi and Mumbai. It is owned by Palred Online Technologies Pvt. Ltd (POT), which is a subsidiary of Palred Technologies Ltd (PTL), a listed company on BSE and NSE since 2004.
Having launched with an investment of under Rs 30 crore, LatestOne.com is now clocking a quarterly net revenue of Rs 12.5 crore and is on track to become one of the first few Indian e-tailers to declare a gross profit during FY 2017. They have substantially reduced their burn rate over the last couple of years — expected to be Rs 7.5 crore during FY 2017 — mainly related to indirect costs. For quarter four, the gross margin contribution is expected to be 15 percent and the overall burn rate is set to go below 10 percent of net revenue.
Ashish Dhawan, Founder of Chryscapital and an existing investor for over 10 years, is also participating in this financing round apart from another existing investor, Passage to India Master Fund.
Palem Srikanth Reddy, who now serves as the chairman of the company, said, “This is particularly gratifying considering that funding for e-com companies is drying up. We are excited about the participation of Florintree in this financing round and their decision to join our board. We believe that the support of institutional investors and the right investor mix is critical to the long-term success of the company. The funding will be used for accelerating our growth through investments in additional fulfilment centres, brand building, inventory, building B2B channels, and developing the managed marketplace further.”
Following this round, the stock on the BSE and NSE clocked a 52-week high and rallied 53 percent in the past four trading days from Rs 108.15 on March 7, 2017.