Social e-commerce company Merabo Labs Private Ltd., which operates under the brand name DealShare has announced plans to invest up to $250 million this year to expand it operations, founder & CEO Vineet Rao said.
“So far we have raised close to $340 million. We have invested $100 million. A large part of that has gone into capital expenditure into building all the warehouses, assets, inventory purchase and GST credits,” he said in an interview.
“In FY23, we plan to invest another $100 million to $250 million into our expansion, strengthening our technology and also in working capital,” he said.
He said the company had about $240 million in the bank and this amount will be utilised for the capex.
Stating that the company was still in the process of raising additional capital he said funds would be utilised in building assets. “We are also looking at acquisitions, potentially some of these smaller brands, which can be part of our network and grow faster,” Mr. Rao added.
“We are looking at acquiring some of the brands [which] we are setting up, potentially [we will be ] investing directly into manufacturing, also where we see gaps,” he said. “We will be looking at technology assets. I think this is a great time for us to raise more capital and invest into bettering our assets,” Mr. Rao further said.
The company, which started its operations in 2018 from Jaipur, had either doubled or tripled its business in 2020, he said. “From 2021 to this year March, we have grown 6.6 times. In March 2022 we crossed a gross revenue run rate of $1 billion,” he said.
Today, present in 10 states and over 130 cities, the company plans to take its presence to 20 states and more than 300 cities and towns in FY23.
“We believe the market is massive. We are continuing to grow very rapidly, while continuing to improve our unit economics. While we grew fast we also reduced our losses by five percentage points at a net revenue level. EBITDA has improved by five percentage points,” Mr. Rao said. “The next 6-12 months are going to be very exciting as we move very closer to profitability,” he added.
He said in the next 12 months the company would grow at least three times to have a gross revenue run rate of $3 billion. “Our expansion would be densification in our existing states. We are quite dense in Rajasthan, NCR and Gujarat. We will densify Maharashtra, Karnataka and West Bengal,” he said. “Then we will start on the densification Uttar Pradesh, Telangana and Tamil Nadu,” he added. The company recently entered Madhya Pradesh then will enter into nine states over the course of this year.
