No fashion faux pas for Myntra; what the startup got right
Myntra's founding team is now half its original size, but the company is showing no signs of slowing down
October 14, 2013 / 13:50 IST
Shonali Advani
In just three years, Myntra has grabbed the top spot among fashion and lifestyle e-commerce sites ever since its founders switched the business model from personalized products to grab a share of a larger market in 2010. A recent ComScore report says the portal received 13.7 million visitors in June 2013 beating rivals Flipkart and Jabong. When the company was incorporated in February 2007 by Mukesh Bansal, 38, and Ashutosh Lawania, 36, both IIT-Kanpur alumni, e-commerce was just finding its feet in India with travel tickets being sold online."Broadband penetration was increasing and we saw it was only a matter of time before e-commerce would become mainstream. We felt personalized gifting was an innovative business since nothing else existed at that time," says Bansal, Co-Founder and CEO, Myntra, who got in two others into the founding team -- Raveen Sastry, 35, and Vineet Saxena, 36, the same year.The four pooled in Rs 50 lakh as seed money to try and conquer the online world by starting the business. But by 2010, they saw that e-commerce was becoming an irresistibly hot sector attracting both entrepreneurs and investors. It was time for a detour. "After three years, we realized personalized products was a niche category and one can build a small boutique business with it but not more," Bansal states. Today, Myntra boasts of 35,000 products, 600 brands and revenues of Rs 400 crore in the last fiscal. It has received $75 million in funding over multiple rounds from Tiger Global, Accel Partners, IDG Ventures and Kalaari Capital, the last of which came in 2012.Right movesArmed with these numbers and investor confidence, you could say that the founders have done quite a few things right. The first was jumping into a big category like fashion. Though the earlier business was generating Rs 10 crore - Rs 12 crore in revenues riding on 500-600 orders per day, the boys wanted something meatier. "Travel portals had become big and by 2010, five million people were shopping online," Bansal recalls.The second was to get in experts from the industry with deeper domain knowledge for certain key functions. "The first year was amorphous, everyone did what was needed to be done," recalls Lawania, CEO, who looked after back-end technology. Saxena took care of operations including supply chain and orders, Sastry managed marketing and B2B retail and Bansal had investors, strategy and finance in his ambit.Bansal feels being a team of four gave them flexibility, additional manpower and helped them to stay motivated, especially since they did not draw salaries for two years. "Three to four people is an ideal number to start with. It gives a startup the right mix of people with different backgrounds and ideas," Bansal affirms. Sastry says having a large founder base allows entrepreneurs to jump in and take control of every aspect of business. As a result, they were able to attract their first round of funding within a year, in 2008 -- $5 million from IDG Ventures, Accel Partners, NEA-Indo-US Ventures (now Kalaari Capital). "We had reasonable traction, were getting customers, and our business model was in place," Bansal says.Investor money gave them the financial bandwidth to hire domain experts, that helped it scale faster, increase web traffic and take on a larger load. Myntra, to date, fulfills 12,000 orders daily. From mid 2010-11, Myntra brought in heads for human resources, operations, finance, supply chain and other departments. "Within nine months of Ganesh Subramanian joining, we had 200 brands on our portal," recalls Lawania. Subramanian is the COO at Myntra, who joined late-2011.Making roomWith the entry of many functional heads, the founders stepped back a bit. "We gave them room to take day-to-day operational decisions," says Bansal. In the bargain, the personal roles of the founders evolved. Bansal tells us his involvement became outward-focused and strategic in nature and he managed investor relations, public relations and customer-orientation. Lawania moved to the more front-end digital marketing role. "It took us a while to get a Chief Marketing Officer (CMO), so I handled that till then," he says. Vikas Ahuja, the current CMO, came in mid-2013. Business benefits apart, these professionals brought in a tectonic shift within the organisation. By 2011, Sastry and Saxena moved out. "They wanted to be part of a smaller startup environment and it was a fairly amicable transition," says Bansal. With a team strength of 1200, distribution centers in 20 cities, a warehouse each in Bengaluru and Delhi, and a revenue run rate that will touch Rs 500 crore shortly, Myntra is set to achieve profitability by FY14-15, Bansal says.In November 2012, Myntra.com acquired Exclusively.in and their global private label online brand Sher Singh, specialising in sports-inspired lifestyle apparel for men and women. More recently, in April 2013, Myntra acquired San Francisco-based Fitiquette, which is into solving fit and sizing issues for online shoppers.As for the two who've stayed with Myntra, the passion for growing the business has not worn out. "Our next focus is to get to profitability, make our business bigger, and go deeper into categories," Bansal states as he plans to focus on Tier II and Tier III cities, a segment that is already contributing 50 percent of total revenues. "Ashutosh and I are on same page," Bansal says. "And we aren't planning to sell out either."Related Posts Random Access: Changing for the good
E-commerce mortalities to grow as big boys will crowd out funding
Myntra acquires San Francisco-based FITIQUETTE
Shut happensYou can send your feedback on smementor@moneycontrol.com or simply post comments below Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
