Construction materials marketplace Infra.Market is in advanced talks to raise $125 million led by existing investor Tiger Global Management at a valuation of $2.6 billion post-money, continuing the New York-based firm’s aggressive deal-making streak in Indian startups, sources said.
The round will more than double Infra.Market’s valuation from just three months back when it was valued at a billion dollars, said these people, who requested anonymity since talks are private.
Founded by Souvik Sengupta and Aaditya Sharda in 2016, Infra.Market is a business-to-business (B2B) e-commerce firm, running a brand of construction material, concrete and chemicals used in infrastructure projects. It ties up with contract manufacturers, gets them to utilise idle capacity and manufacture products under its own brand, which it then sells to large infrastructure companies and retail outlets.
Infra.Market currently has an annual revenue run rate of $700 million, or monthly revenue of $58 million (Rs 408 crore), compared to Rs 200 crore monthly revenue in March, when it last raised $100 million led by Tiger and became a unicorn- a term for privately held firms valued at a billion dollars or more.
Its other investors include Accel, Nexus Venture Partners and Sistema Asia.
While Tiger’s investment is expected to close in the coming weeks, Infra.Market has also separately held conversations with private equity giant TPG for an investment at a similar valuation. However these talks are still at an early stage.
Tiger and TPG declined to comment while Infra.Market denied funding discussions.
“We are not in discussions with Tiger Global for an investment...The valuation numbers you have mentioned are magical. Hope they are true. But sadly no such discussions,” Sengupta said in an emailed response.
“They are growing super fast, and that too at this scale. Tiger realises that if they do not, someone else will lead this round. So, they are closing their investment quickly, and other large investors may join in later,” said one person briefed on the matter, requesting anonymity.
Tiger’s latest investment underlines its breathtaking, unprecedented investing spree in startups world-over (and India) in the last few months. Tiger has invested close to a billion dollars in Indian internet firms this year, this person added.
As per founders who have raised money from Tiger, the Scott Shleifer-led firm is creating an index of promising internet startups, picking up stakes in all the companies it finds promising- across sectors, stages and sometimes taking multiple bets in a sector.
Another B2B commerce firm - OfBusiness - is raising money from SoftBank at a valuation of $1.5 billion, Moneycontrol exclusively reported on June 2. OfBusiness originally started lending by providing raw material, but later expanded to ecommerce as well. Industrial goods marketplace Moglix too became a unicorn earlier this year, when Falcon Edge Capital led a $100 million round.
Infra.Market is one of India’s most unique unicorns- it was bootstrapped for three years, operates in a very offline and fragmented market like infrastructure goods and most rare of all- it is profitable.
“(India) has a lot of idle manufacturing capacity. India has 550 million tons of cement capacity, but only 270 million is actually utilised. Manufacturing from small local producers is widely available. So our thinking was: can we create a brand in this space? Can we follow the same model for multiple products?,” Sengupta told Moneycontrol in an interview in March.
“We bootstrapped it for three years. We ran it profitably for three years. But banking in India moves slowly for startups, even if you're profitable. So we took our first cheque from Accel, and since then, we have grown exponentially. From seed cheque to unicorn, it has been 20 months for us,” he added.
