Flipkart has pumped Rs 175 crore into Myntra, the fashion and lifestyle accessories marketplace arm of the e-commerce giant. The fresh infusion for Myntra comes soon after it concluded the 13th edition of its bi-annual End of Reason Sale (EORS).
Myntra Design will allot 491,997 equity shares at an issue price of Rs 3,561 per share to Flipkart Myntra Holdings Pte to raise Rs 175.2 crore, regulatory filings show. The fresh proceeds would help Myntra to maintain its pole position in the online fashion segment.
Since the second half of the last year, Flipkart Group, which owns Myntra, has been strengthening its grip in the lifestyle and fashion apparel space. In October, Flipkart had invested Rs 1,500 crore in Aditya Birla Fashion and Retail or ABFRL for a minority stake of 7.8%. Soon after, it also invested an undisclosed amount in Universal Sportsbiz Pvt Ltd or USPL.
Virat Kohli-backed USPL is counted amongst the leading brands on Myntra over the last few years. Besides its own platform, USPL’s products are primarily sold on Myntra and Flipkart.
Myntra owns a dozen and a half private labels including Roadster and celebrity-backed brands like HRX and All About You. Industry estimates emphasise that Myntra churns about 35% of its total topline via private labels. The company also announced that its private-label business had turned profitable in 2017.
During the EORS held between December 20 and 24, Myntra claimed to sell 11 million items across five million orders. The company further said that over 3.2 million shoppers participated in the event as it processed more than 19,000 items per minute at peak.
Myntra also disclosed its annual financial report for FY20 and saw its operating revenues surge by 61% to Rs 1,675.4 crore. The Amar Nagram-led company spent north of Rs 2,463 crore during the fiscal year ended in March 2020 to achieve this growth. The cash burn pushed online retailer’s losses to Rs 744.4 crore in FY20 growing by 38% from the Rs 539.4 crore in FY19
According to the company, the revenue of the firm was mainly generated from services related to marketplace, logistics and consultancy to various brands.
Flipkart had acquired a majority stake in Myntra for $285.6 million in 2014. As part of that transaction, early backers of the company including Accel, Tiger Global and a private equity fund managed by PremjiInvest got a complete exit from the Bengaluru-based company.