Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Ltd. (RIL), has acquired a majority stake in online furniture retailer Urban Ladder, the company announced on Sunday.
RRVL has bought a 96% stake in Urban Ladder for Rs. 182 crore.
The move comes as Reliance attempts to break into India's online retail market, currently dominated by Walmart-owned Flipkart and Amazon India.
According to Mint, the company informed the stock exchange on Saturday night that it has bought 96% holding in the equity share capital of Urban Ladder with a further option of buying the remaining stake, taking its shareholding to 100%.
The company said it further intends to invest up to Rs. 75 crore, which is expected to be completed by December 2023.
Urban Ladder was founded by Ashish Goel and Rajiv Srivatsa in 2012. It is a digital platform for home furniture and decor products and also has a few retail stores across India.
Its valuation stood at Rs. 1,200 crore in 2018, but dropped to Rs. 750 crore in 2019.
The company notably struggled to raise capital after its Series E funding two years ago.
Reliance Retail said in a statement, "The aforesaid investment will further enable the group's digital and new commerce initiatives and widen the bouquet of consumer products provided by the group while enhancing user engagement and experience across its retail offerings."
No governmental or regulatory approvals were required for the investment. None of RIL's promoter/promoter group/group companies have any interest in the transaction.
The development is likely to lead to consolidation among online furniture retailers to create fewer, more dominant brands. Smaller retailers crumble under e-commerce giants and the unorganized sector.
With Urban Ladder's buyout, the sector is now dominated by Flipkart, Amazon India, and market leader Pepperfry.
The sector remains stressed as funding has remained subdued amid existing investors' pressure on e-furniture markets to turn profitable.
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