Bengaluru: Urban Ladder turns to existing investors to raise Rs 100 cr in funding to take war to rival Pepperfy

Bengaluru-based furniture and home decor e-commerce store Urban Ladder Home Decor Solutions is all set to raise in excess of R100 crore from existing investors. Urban Ladder is in discussions with existing investors such as Kalaari Capital, SAIF Partners India IV, Steadview Capital Mauritius, Sequoia Capital and others. The company is locked in a battle with Pepperfry for a larger share in the furniture market.

The company has secured approval from the shareholders at an extraordinary general meeting held on January 5 to make a preferential offer to existing investors to raise fresh funds. Urban Ladder intends to allot Compulsorily Convertible Cumulative Participating Preference Shares (CCCPS) of R20 each for cash at a premium of R19,147.41 per share aggregating to a total consideration of R101.85 crore in one or more tranches, according to a filing with the registrar of companies.

Urban Ladder proposes to issue additional shares of the company to meet its financial requirements for future expansion and achieve market dominance. It proposes to offer, issue and allot 53,141 Series E fully and CCCPS. The price has been decided on the basis of valuation certificate given by the registered valuer, it said in its filing.
Urban Ladder did not comment on the proposed fund-raising plan.

“There will be no change of control in the company consequent to the preferential offer. The management control will continue to vest with the board of directors of the company and the day-to-day control of the business and operations is with the key management team,” the company said.

Urban Ladder was founded in 2012 by IIM Bangalore alumni Ashish Goel and Rajiv Srivatsa. It has till now raised $77 million in equity funding from the same set of investors. Ratan Tata is also an investor in the firm.

Currently, the promoters hold 28.34% of the total shareholding, while the private corporate bodies hold the balance stake in the company. The expected dilution in equity share capital upon conversion of the newly proposed Series E Preference Shares will be at the ratio of 1 equity share for every Series Preference Share, with anti-dilution rights at the time of actual conversion, the company said.

It reported a net loss of R175 crore for the year ended March 2016, a three-fold rise over the previous year. Revenue rose three times to R56 crore. Sales revenue stood at R34 crore against R12 crore a year ago.