London-based Koovs today said it has raised GBP 21.9 million (about Rs 212.4 crore) to expand operations in the burgeoning Indian eCommerce market.
Koovs, the parent company of Indian lifestyle e-commerce venture operating under the same name, is listed on the London Stock Exchange.
Koovs plc has raised gross proceeds of GBP 21.9 million through the issue of 87.6 million new ordinary shares at a price of 25 pence per ordinary share.
This capital raising includes investments from both existing shareholders and new institutional investors, including Ruffer LLP.
"India's online fashion market is expected to increase five-fold by 2020 to GBP 1.5 billion (about Rs 14,559 crore) and we have a clear strategy to accelerate Koovs' growth in this market," Koovs CEO Mary Turner said in a statement.
The capital raising demonstrates the confidence of both new and existing investors in the company's strategy and provides further investment to scale the business, she added.
"Our near term priority is to continue to build the brand, and we will be launching the next phase of our marketing campaign in five additional cities," she said.
The ambition remains to become India's number one western fashion destination by 2020 and today's announcement marks a next significant step towards that goal, she added.
Besides, Koovs has authority to raise up to an additional GBP 8.1 million (about Rs 78.5 crore) prior to June 30, 2016.
"In addition, some funds will be used to acquire the remaining 38.6 per cent stake in Koovs Marketing Consulting (Koovs India), as a result of which Koovs will own 100 per cent of its subsidiary," the statement said.
The shares, being bought from Infotel E-Commerce (a company controlled by Anant Nahata) will be purchased for a total cash consideration of GBP 9 million.
As reported in the Group's annual financial statements, Koovs India generated a loss before taxation of Rs 63.25 crore (GBP 6.4 million) for the year ended March 31, 2015.
Turner had recently said the company expects to see a three-fold growth in business this year.
"We saw revenues growing to about GBP 10 million last year, which was three times growth over previous year. This year, we expect to see similar growth. We have said we will be profitable by March 2019 and we are delivering to that target," she added.
Koovs, which focusses on the western wear category in India, has seen registered userbase growing to one million. This is an increase of 226 per cent over the last year.
