Indian etailer Koovs is seeking a further £50m investment to accelerate growth plans and narrow its losses.
Over £70m has already been invested in the business to date, from ecommerce and media entrepreneurs, Indian corporate firms and institutional investors.
The new funding will be used for marketing. Pending its arrival, the company said it was “focused on cash preservation”. As of 1 March 2018, Koovs had cash balances of £3.5m, with future monthly outgoings forecast to be £750,000 per month.
In the first half of its current financial year, gross sales were flat at £7.9m. The business expects sales in its second half to be lower than expected, leading to full year sales of £14.5m, down from £18.6m last year. EBITDA is expected to improve to a loss of £14.4m, down from a loss of £19.6m the previous year.
Capital markets research firm Hardman & Co said it believed “all the ingredients were in place for Koovs to suceed” but said it needed pace. ”Its success will come on the back of the growing Indian economy breeding millions of online shoppers.To exploit this opportunity, Koovs needs to raise a substantial amount of capital.”
Mary Turner, chief executive of Koovs, said: “Growth is already returning to India’s ecommerce market following the introduction of demonetisation and the goods and services tax, and we believe that the strong fundamentals underpinning the market’s long-term growth remain undeniable.
“As India’s best-established affordable fashion brand with sector leading customer service and a significant social media following, with the benefit of investment, we will be well positioned to scale up the business by leveraging our competitive advantages.”