The competitive online furniture marketplace Urban Ladder has finally been acquired by Reliance Industries Limited or the RIL subsidiary in an emergency sale. RIL has acquired a 96% stake in the Bengaluru-based company through its wholly owned subsidiary Reliance Retail Ventures Limited (RRVL) for a cash consideration of Rs 182.12 million.
RRVL has an additional option to acquire the balance of the 4% stake in Urban Ladder, based on documentation submitted by RIL with the Bombay Stock Exchange records. This is Reliance’s second deal in the e-commerce space in 2020.The Mukesh Ambani-led firm had acquired a majority stake of 60% at Netmeds for a Rs 620 crore cash deal in August.
RIL has proposed to infuse Rs 75 crore into the Urban Ladder by December 2023, bringing its 100% ownership in the furniture retailer. “The aforementioned investment will further enable the group’s new and digital commerce initiatives and will expand the range of consumer products provided by the group, while improving user engagement and experience in its retail offerings,” the launches added.
This is the second largest emergency sale of furniture and décor space online. Future Group had acquired Fabfurnish, owned by Rocket Internet, in 2016. While Rocket had invested more than $ 50 million in Urban Ladder, it sold for less than $ 2 million.
Prior to this deal, Urban Ladder had raised over Rs 770 crore or $ 105 million from companies such as Steadview, Sequoia Capital, SAIF Partners, and Kalaari Capital. The company has been struggling for the past two years to find new backers, while existing investors had long ago canceled it.
It is worth noting that one of the Urban Ladder co-founders, Rajiv Srivasta, left the company last year. Srivasta joined Antler, Singapore-based early stage venture capital and private equity firm, as India Director and Local Partner.
Urban Ladder and Pepperfry promised to disrupt the disorganized home furnishings and décor market during 2012-13. However, Urban Ladder lost the plot for various reasons, including challenges in supply chain management, poor quality, and more.
Experts believe that the entry of Ikea has dried up investor confidence in the segment. With the acquisition of Urban Ladder, Pepperfry is the only major independent player in the online furniture segment. The company recently high a $ 40 million round led by Pidilite with a valuation of over $ 460 million.
