Craftsvilla, an India-based marketplace for ethnic goods, has closed a $34 million Series C round as it begins to ramp up its overseas expansion plans. The investment was led by existing investors Sequoia and Lightspeed Ventures. Nexus Venture Partners and Global Founders Capital, which are also existing backers, participated alongside Apoletto Asia.
The four-year-old company, which you could compare to Etsy — although it doesn’t just sell handcrafted goods — raised $18 million back in April of this year. Speaking to me at the time, CEO Manoj Gupta — a former VC with Nexus — said he was targeting a future $100 million round, but in an interview today, Gupta said that he decided to raise a more modest amount.
“We still have money left [from our previous round] but saw strong inbound interest,” he explained. “We don’t need that kind of money [$100 million], we’re all about capital efficiency, but [we wanted to ensure that] even if the market turned, we would still have sufficient money in the bank to hit our goals.”
That goal is to take the company to $500 million in annual GMV in the next year. When it raised money in April, Craftsvilla was seeing $5-10 million GMV per month. Now, Gupta said it has doubled that figure to over $10 million, but it will need to double again it all over again to hit that ambitious target.
The signs are positive though. Already, since April, Craftsvilla has grown from 2 million products from nearly 12,000 merchants to 3.5 million products from over 25,000 merchants — while GMV has increased six-fold in the past year.
The company has embarked on a series of campaigns, including TV ad spots, to raise awareness of its site and ethnic goods. Most of those have been online ‘festivals’ — such as Craftsvilla Miss Ethnic and World Ethnic Day.
Craftsvilla is also looking at international growth. It has already set up an entity in Malaysia — where it has two staff and hopes to open its service in January 2016 — and beyond that ut is focused at Indonesia, with a population of over 250 million, and the Middle East.
“Ethnic products are very strong in Muslim countries,” Gupta said, explaining the focus on overseas markets. “We may even enter the U.S. or Europe, too. They are interesting from a demand perspective.”
Despite these international ambitions, Gupta said that “99 percent” of his focus in India. As part of that, Craftsvilla is preparing to expand into new verticals — including food and herbal items — while it is also close to launching its own private label brand.
The thinking behind that latter strategy is that a private label could be used to sell selected merchandise from Craftsvilla via different commerce channels, be that within offline stores (or national chains) and potentially other e-commerce services, too. Not only does that provide new revenue opportunities for the company and its merchants, but it could also increase awareness of the site among new demographics in India.