BabyOye, a startup in online babycare product has raised $2.5 million from Accel Partners and Tiger Global [ funds that earlier co-i
nvested $6million in LetsBuy].
Started by a couple, Sanjay and Arunima, BabyOye boasts of 80 brands/4,000 products and will use the funding to hire/expand supply chain/warehouses and increase the product range.
If you look at it, most of the ecommerce startups in India started with a niche, raised VC money and are now chasing (or being forced to?) the valuation game (with no tab on margin).
Considering the huffing and puffing Indian VCs are doing for ecommerce (which doesn’t mean much for their success really – except that fund raising is easier) – this is a good time to get good valuation if you have decent revenues. [from an earlier story]
We certainly hope this nascent category doesn’t meet the same fate, as these startups do solve a market problem.
» Related Startups: FirstCry and Kidloo.
» Recommended Read: Ecommerce Investments in India – Are VCs Hedging Risk?
[Thanks Dhruv for the tip.]
Why would they need so much money? They just need a payment gateway implemented right anyways ?
& fix up customer service & delivery process.
I ordered 5 things , got 1 , order shows processed , No one replies from customer care since 2 weeks …..
So they will need funding to improve process :)
Congrats to Sanjay and Arunima. This niche has a serious potential considering that a happy customer is likely to stay with you for a good 3-5 year period. So as long as BabyOye continues to keep its customers happy, they should grow quite well..
@Statspotting
Not so simple. Warehouses (and subsequent Supply chain optimization) come at a cost..
Thanks Anand – obviously did not think it through -
Congrats to the Team.
Buying online for Babies is still a nascent concept in India.. let us see how it scales up
What is unique and interesting about baby stuff is the frequency and volume.
Volume: Just imagine, when a baby is born, how many diapers would you need to purchase over the next year or two?
Frequency: You will need a good number of diapers every week / fortnight. Its really easy to forecast demand this way.
Also, when a baby is born, this purchase cycle will go on for at least a year or two. So once you have a customer, he/she is with you for a reasonable period ( unless of course you screw up in service ).
Yes, this does not apply to all the products, but all you need to have is a few products with this behavior to build a really big business around it. Plus India has a very healthy population growth rate :).