MUMBAI: From gaming to fashion. It has been a busy week for Walmart-owned Flipkart on the acquisitions front. The e-commerce giant announced on Thursday that it has bought an equity stake in fashion brand Universal Sportsbiz Pvt. Ltd. (USPL), as it looks to strengthen its fashion portfolio.
On Tuesday, Flipkart had announced the acquisition of the intellectual property and team from Mech Mocha for an undisclosed amount to strengthen its gaming strategy.
According to a company press statement issued Thursday, Flipkart has invested an undisclosed amount in the eight-year old fashion brand’s Series F round. Following the investment, the Flipkart Group will work closely with the USPL team to deepen product offerings on its platforms. The Series F round also saw participation from existing investor Accel Partners.
“This is a Series F funding for USPL from the Flipkart Group along with participation from existing investor Accel Partners. This investment will significantly step-up the online strategy of USPL by strengthening the existing long-standing engagement between USPL and Flipkart Group,” Flipkart said in a statement.
Founded in 2015, USPL has built a portfolio of premier youth-focused fashion brands for young Indians, including WROGN Active (men’s athleisure line in which cricket superstar Virat Kohli holds a stake and is the brand’s face), IMARA (women’s ethnic wear, Kareena Kapoor Khan brand face), Ms. Taken (women’s western wear, Kriti Sanon face of the brand), and SINGLE (men’s casual wear brand, which Ranbir Kapoor fronts).
USPL’s flagship brand WROGN has been among the leading brands on Flipkart group company Myntra over the last few years, the statement said.
USPL brands are also present in over 750 offline retail outlets in more than 100 cities across India and USPL has been growing at 40-50 per cent year-on-year.
“The last few months have provided a great opportunity for us to consolidate our market leadership among homegrown brands catering to the youth and expand our market share. Post-pandemic recovery has been great for us and we are at about 80 per cent of pre-COVID sales,” Anjana Reddy, founder and CEO of USPL, said.
Reddy added that as the world is moving towards omni-channel retailing, the company can significantly strengthen its online strategy by working with Flipkart and Myntra, two prominent players in the Indian online fashion space.
“USPL’s unique brands, backed by celebrity endorsements, have a strong appeal for the young fashion-driven Indian consumer. This investment will help USPL and the Flipkart Group find deeper synergies as we continue on our commitment to grow an ecosystem of partnerships that deliver value for consumers and brands,” Flipkart Group CEO Kalyan Krishnamurthy said.
While the details of the Series F round were not disclosed, USPL had earlier raised Rs 113 million from Accel and NB Ventures in Series E round in May 2020 at an estimated valuation of Rs 12.5 billion, entrackr reports.
entrackr further reports that after allocation of shares in the Series E round, Accel held the biggest stake in the company, controlling 51.38% shareholding. Company founder Anjana Reddy held 19.55% whereas cricketing legend Sachin Tendulkar held a 6.14% stake. NB Ventures and Alteria Capital Advisors held 4.49 and 1.03% stake respectively and ESOPs made up nearly 3.72%.
Just before Flipkart’s announcement, the USPL board had passed a special resolution to allot 3046 partly paid equity shares to Virat and his talent management firm Cornerstone Sports. Post allotment of these shares, Virat will likely be the second-largest individual shareholder in USPL with 8.53% stake and Cornerstone will hold a 3.46% stake, according to entrackr.
Importantly, all stakeholders will dilute their holding when Flipkart would be allotted shares for Series F round
Business Today additionally reports that in October 2018, USPL had raised $13.5 million (around Rs 1 billion) from investors, valuing the company at around Rs 12 billion.
This is Flipkart’s third significant investment in an offline fashion retailer this year. The company, which dominates over 60% share in the online fashion market, recently invested Rs 15 billion in Aditya Birla Fashion and Retail Ltd. (ABFRL) to pick a 7.8 per cent stake. It also acquired a stake in Arvind Youth Brands, the owner of the Flying Machine brand, in July this year for Rs 2.6 billion.
These investments are expected to help Flipkart gain a bigger foothold in the Indian market as it battles it out with rival Amazon and billionaire Mukesh Ambani-run Reliance Industries, which is rapidly expanding its retail business via major acquisitions and large-scale funding from overseas investors, including Silver Lake and KKR.
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