The deal is expected to close in the next few months and will make Moglix India’s fifth unicorn of 2021
Industrial goods marketplace Moglix is in talks to raise $70-100 million in a round of funding which will triple its valuation to a billion dollars- making it India’s latest unicorn, sources told Moneycontrol.
London-based hedge fund Falcon Edge Capital, an investor in multiple Indian unicorns such as Dailyhunt, Dream11 and Ola is in talks to lead the round, by investing about $40-50 million, while existing backers including Accel, Sequoia Capital, Tiger Global Management will contribute the rest, said the people who requested anonymity.
A spokesperson for Moglix declined to comment while Falcon Edge did not respond to emails seeking comment.
Moglix was valued at about $250-300 million in its last round in July 2019, when it raised $60 million led by Tiger- at a time when Tiger had gone on a B2B and software dealmaking spree.
Founded by former Google executive Rahul Garg in 2015, Moglix sells a wide range of industrial tools on its platform including hammers, drills, wrenches, office stationery and supplies, hospital supplies and automotive supplies. Moglix has been among the many startups tackling the business-to-business e commerce space in India, seen as a huge market ripe for disruption after the likes of Flipkart grew in the consumer facing ecommerce domain.
Some of the B2B ecommerce firms in India include Udaan, Infra.market. Jumbotail, Ninjacart and ShopX.
For FY19, the latest period for which its financials are publicly available, Moglix’s revenue more than tripled to Rs 217 crore from 62.4 crore, while its losses grew marginally from Rs 28.06 crore to 48.08 crore.
Currently it has an annual revenue run rate of $120 million, or about $10 million in monthly revenue, said another person close to the company, requesting anonymity.
“The valuation is a little crazy, but it is a result of market momentum. Anyone who is showing ability to execute without burning cash massively is able to raise money at a premium,” the above person added.
The COVID-19 pandemic also helped accelate demand for Moglix. In addition to companies buying online more frequently, Moglix also started selling pandemic-related safety items including gloves, masks and Personal Protective Equipment (PPE) kits.
In April 2020, it also launched services in the UK and other parts of Europe, but it is unclear how deeply Moglix has penetrated into the market or which products it is selling there.
The deal is expected to close in the next few months and will make Moglix India’s fifth unicorn of 2021 after insurance firm Digit, software-as-a-service firm Innovaccer, fellow B2B retailer Infra.market and lender Five Star Business Finance.
2020 produced a record 12 unicorns, and if the current rate is anything to go by, 2021 could be another record year for unicorn creation. Moneycontrol wrote on March 21 a rise in internet users during the pandemic, startups growing faster than ever and VC firms with billions to spend has led to a deal-making frenzy. Investors are more aggressive than almost ever before, and even late stage investors are betting that companies can still grow manyfold from here on.
Falcon Edge, founded by Rhodes scholar Navroz Udawadia has become an increasingly active investor in Indian startups. It is an investor in firms including ride hailing firm Ola, news aggregator Dailyhunt and fantasy sports firm Dream11 among others.
More recently it has also been investing from Alpha Wave Incubation, a fund sponsored by the Abu Dhabi government but managed by Udwadia. AWI has done early stage as well as pre-IPO investments- such as $75 million in insurance marketplace Policybazaar last week.