V-Mart buys Tiger Global-backed LimeRoad in distress sale

Retail company V-Mart Retail has acquired direct-to-consumer (D2C) fashion brand LimeRoad in an all-cash deal as part of a distress sale.

As part of the acquisition, the company is acquiring assets worth Rs 14.61 crore and assuming current liabilities of Rs 36.26 crore, V-Mart said in a stock exchange filing.

The sale is likely to help V-Mart strengthen its online presence through LimeRoad's user base of five crore online shoppers in Tier II and III markets.

This also comes at a time when the fashion startup is struggling to keep up with competition from online players like Amazon, Flipkart, and Myntra. So far, LimeRoad has raised over $50 million from marquee investors like Matrix Partners, Tiger Global Management, and Lightspeed India Partners.

V-Mart will also invest Rs 150 crore to help LimeRoad achieve profitability, it said in a statement. The listed entity currently has a network of 450 stores across the country, while LimeRoad is said to have achieved over two lakh downloads per day along with a gross merchandise value (GMV) of Rs 700 crore. GMV is a commonly used term that refers to the total value of goods and services sold over a period of time by a retail company.

LimeRoad will operate as an independent entity under the V-Mart label and the startup's CEO Suchi Mukherjee will continue her role.

“V-Mart is one of the strongest players in the value retail segment fulfilling the fashion needs of masses across India. With this acquisition we aim to not only acquire digital-first millennials but build our Omni-channel expertise," said Lalit Agarwal, Managing Director of V-Mart Retail Ltd.

The completion of the transaction is subject to necessary approvals and conditions from regulatory authorities, the statement noted. Metta Capital acted as an exclusive financial advisor and Saraf and Partners acted as legal advisor to V-Mart for this transaction.

(This story was updated to clarify the details of the deal based on the company's inputs.)