Companies sign nondisclosure agreements, and according to sources, the D2C firm’s personnel will join Aditya Birla’s new company.
Aditya Birla Fashion & Retail (ABFRL) is close to entering the direct-to-consumer (D2C) market when it completes the acquisition of a majority stake in the garment and accessory company Bewakoof for around 100 crores.
“A non-disclosure agreement has been signed by both parties, and due diligence has been completed. The Bewakoof team is also relocating to join Aditya Birla’s new business, according to a senior executive who wished to remain unnamed.
One of the country’s earliest D2C brands, Bewakoof was formed in 2012 and boasts yearly revenues of roughly 250 crore. Since its founding, investors like Investcorp, IvyCap Ventures, and Spring Marketing Capital have contributed 160 crore in capital.
India is a desirable market for clothing companies, especially now that young people are gravitating toward western-style clothing, a sector in which Bewakoof competes. To support its expansion objectives, the company has been looking at strategic buyers and investing over the last few quarters, according to the CEO. While Bewakoof did not answer ET’s questions, ABFRL declined to comment.
ABFRL established its direct-to-consumer company, TMRW, in June and announced plans to incubate and acquire 30 brands over the following three years. ABFRL’s aim to develop a portfolio of cutting-edge, digital brands spanning sectors in the fashion, beauty, and lifestyle segments includes the new company, which is purchasing Bewakoof.
In the near future, there will undoubtedly be many more trades of this nature. When larger funding rounds seem a little difficult amid a global economic slowdown, this also helps early-stage investors get exit opportunities, according to Dhianu Das, cofounder of Agility Ventures.
ABFRL, which carries items from designers such as Van Heusen, Allen Solly, Peter England, and Louis Philippe, intends to let different entrepreneurs work together on a platform that has shared features. ABFRL stated during its results call for the previous quarter that it will make eight to ten investments by the end of this fiscal year in early-stage digital-first firms, with an initial concentration on broad categories of fashion.
In order to make up for their tardy entry into the online market, which now accounts for 30–50% of sales for numerous brands, experts claimed conventional firms had the resources to purchase fresh D2C brands.
“Despite a decline in late-stage funding, huge corporations are increasingly interested in buying existing brands that have excellent products and strong consumer loyalty. According to Abhimanyu Bisht, CEO of Venture Catalysts, this is not just a smart path for these organizations to take, but also a natural one.
According to Tracxn, a market intelligence provider of private company data, nearly 590 new D2C companies have entered the Indian market in the last three years and have raised a combined total of Rs 6,700 crore. Experts predict that the D2C business opportunity in India would reach $100 billion (about Rs 8 lakh crore) by 2025.
According to a report from Nuvama Institutional Equities, “With organic and inorganic build-up, ABFRL’s new venture will first be incubated and funded by ABFRL and will subsequently bring in external capital to accelerate the growth path at a suitable moment in the future.”
