Internet firm Info Edge, in a filing to the Indian bourse's said that it is writing off its investment worth Rs 29.3 crore in e-commerce player Ninety Nine Labels.
“Info Edge (India) Ltd has informed BSE that the Company will be providing for / writing off its entire investment of about Rs 293 million in Ninety Nine Labels Private Limited during the current quarter,” said the company in a filing to the Bombay Stock Exchanges.
Ishita Swarup, founder and CEO of 99labels told Business Standard that this does not impact business in any way. Ninety Nine Labels has two websites-- 99labels.com and 9rasa.com. Calls made to Sanjeev Bhikchandani, founder and vice chairman of Info Edge, remained unanswered.
“Info Edge writing off their investment in 99labels does not impact our business. They wanted to write-off this investment in the current financial year. They were the only institution investors in 99labels and the rest of the investment were made by individuals, who continue to be with us,” said Swarup.
When asked if the reason for Info Edge to write-off the investments was due to the fact that e-commerce players have not been able to break-even, Swarup said: “None of the e-commerce players are doing well, and there are only few who might have been able to break-even. But 99labels will break-even this year.”
Swarup also added that she was in talks with investors to raise further funds for its new portal, focused on Indian ethnic wear and accessories, 9rasa.com. She added that the company will be in a better position to announce the same within the next one month or two.
When asked on the news that 99labels.com is on the verge of shutting down, she said: “Both our websites are doing well. Rather we have a better user base on 99labels.”
Last year in September, InfoEdge had informed the BSE that it has invested an additional amount of Rs 5 crore in Ninety Nine Labels.
In the recent past several of the e-commerce have taken the road of consolidation as investors have started to look at making business profitable.
Last year, Flipkart acquired Letsbuy, and signalled the trend towards consolidation. This year private equity (PE) major SAIF Partners-backed fashion retail sites — Zovi and its rival Inkfruit — merged their business. SportsNest.com, an e-commerce venture offering sports goods and fitness products, merged with its competitor, PlayGroundOnline.com.
