StyleAdda.com Launch Delayed By 2 Months, Valuation Drops 50%

Online, February 24, 2012 (Newswire.com) - StyleAdda.com, India's biggest upcoming e-commerce website will face another two months delay and will be now launched in May, 2012 amid heavy shakeup in Indian e-commerce industry. According to the internal sources private equity investors have asked StyleAdda.com management to have a re-look at the business model to boost the overall profitability of the business. Some of the private equity companies who have reportedly invested in the venture are going through the financial trouble as there other projects in which they invested failed to take off or are generating negative returns.

Large Indian e-commerce firms like Flipkart.com is already facing pressure of low profit margins, recently Flipkart.com acquired Letsbuy.com to strongly stand against Amazon's Indian venture Junglee.com. The entry of large foreign players will impact the bottom line of various e-commerce players and smaller players are leaving no stone unturned to build immunity.

"We are ready with the set up and we are well financed to take on the challenges. We are taking sometime as e-commerce industry is going through massive volatility. The risk appetite of private equity investors is now less hence it is obvious to be cautious while executing the business plan," said Garima Malhotra, Chairperson of StyleAdda.com.

StyleAdda.com has already raised Rs 163 crore from PE funds and may have to raise Rs 90 crore more to market the brand. A source familiar with the development on the basis of anonymity said "StyleAdda.com will buyout smaller e-commerce firms or will enter market in alliance with a larger entity".

The delay have caused massive erosion of StyleAdda.com valuation which touched record US $310 million or INR 1550 crore when a bunch of private equity investors from Dubai offered US $31 million or INR 155 crore for a mere 10% stake in the company.

Recently a private equity investor from Denmark offered us $14.4 million or INR 70.5 crore which values the business at US $143 million or INR 705 crore, a straight erosion of 55% from the peak.