Indian lifestyle e-store startup attracts $8M investment

In just over a year, U.S. venture capital firm Norwest Venture Partners has invested US$13 million in Indian startup PepperFry, which hopes to establish a pan-India sales and distribution network.
Written by Mahesh Sharma, Correspondent

Indian e-commerce Web site pepperfry.com has attracted an investment of US$8 million from American investor Norwest Venture Partners. The company has been operating in the furniture, home and living segment for about a year.

In an interview with ZDNet, PepperFry COO and co-founder Ashish Shah said the US$8 million Series B investment would be used to double the number of its procurement centres, the company's critical nervous system which distributes locally manufactured products to customers across the subcontinent.

By the end of the year it will establish new nodes Hyderabad, Bangalore, Chennai, and Kolkata--in addition to the centers in Delhi, Mumbai, Jodhpur, and Gurgoan--footholds that will be used to sign up new local merchants in the geographies.

When you talk about working with small and medium enterprises it's a different ball game, Shah said.

"We're going to the nooks and corners of the country to find enterprising and ambitious businesses. We hold their hands through the entire process. Some of these don't even know how to operate computers, but we teach them how to use computers and email so they can manage their businesses on their own," added the COO.

He pointed out lot of time is spent on building up loyalty to make it "very difficult for competitors to acquire our customers".

Existing investor NVP has raised its backing in PepperFry.

The company claims to sell an item every minute to customers distributed across a thousand Indian cities. It hit the one billion rupee (US$18 million) revenue milestone at the end of January 2013--just 13 months after its official launch.

The site lists 30,000 furniture and home decoration products manufactured by almost a thousand merchants. The company employs about 140 staff, where almost 100 field workers manage customer relationships and distribution.

In late 2011, when PepperFry was just a business plan prepared by eBay India veteran Shah and his long-time colleague Ambareesh Murty, NVP invested US$5 million in a series A round.

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