Titan, which owns the jewellery chain Tanishq, expects this acquisition to have “very high synergy” with its jewellery business, which generated nearly 80% of its revenues in FY15.
article source: ET Tech : July 14, 2016
Tata group firm Titan Company is buying 62% stake in online jewellery brand and retailer CaratLane for Rs 357.24 crore, the company has said in a stock market disclosure.
In the filing, Titan said it is acquiring 1.91 crore shares (1,91,42,545 shares) in CaratLane that represents 62% of the company’s share capital. The acquisition is expected to close in 14 business days.
In May, the watches and jewellery maker had first announced its decision to pick up a majority stake in the Chennai-based startup. At the time, it had said that the exact stake and acquisition price is still under discussion.
CaratLane, which was incorporated in September 2007, had revenue of Rs 141 crore in 2015-16, up from Rs 127 crore in 2014-15 and Rs 101 crore in 2013-14.
The company has previously raised nearly Rs 350 crore in funding from New York-based investment firm Tiger Global Management.
Titan, which owns the jewellery chain Tanishq, expects this acquisition to have “very high synergy” with its jewellery business, that generated nearly 80% of its revenues in FY15.
“For Titan, the acquisition brings significant capabilities in the e-commerce space along with a brand, a customer segment and a business model that are very exciting,” Titan MD Bhaskar Bhat had said in May this year.
Besides selling jewellery online, Caratlane had also started an omni-channel strategy with 13 stores across the country. The startup was founded by Mithun Sancheti, whose family is also in the jewellery business.
Caratlane competes with players like BlueStone, which has interestingly raised funding from Tata Group chairman emeritus Ratan Tata in his personal capacity.
Other online players in the space include Melorra, which raised Rs 33 crore from venture capital firm Lightbox earlier this year and Voylla, which raised Rs 100 crore from Peepul Capital last year. Interestingly, Flipkart-owned Myntra had alsopartnered Tanishq to foray into fine jewellery in May this year.
Titan’s acquisition of Caratlane is also the second major deal by a traditional brick and mortar retailer in the online space, after Kishore Biyani’s Future Group acquired online furniture retailer Fabfurnish from Germany’s Rocket Internet in April this month.