Moglix to raise $70-100 million in a funding round led by Falcon Edge

Industrial goods marketplace Moglix is looking to raise $70-100 million in a round of funding which will triple its valuation to a billion dollars- making it India’s latest unicorn.

London-based hedge fund Falcon Edge Capital, an investor in several Indian unicorns such as Dailyhunt, Dream11, and Ola is in talks to lead the round, by investing around $40-50 million, while existing backers including Tiger Global Management, Accel, Sequoia Capital will contribute the remaining, said the people who urged anonymity.

Billionaire Ratan Tata and Jungle Ventures are also early investors in the company.

Moglix was valued at about $250-300 million in its last round in July 2019, when it secured $60 million led by Tiger- at a time when Tiger had gone on a B2B and software dealmaking spree.

Founded in 2015 by former Google executive Rahul Garg, the company sells a wide range of industrial tools on its platform including drills, hammers, wrenches, office stationery and supplies, hospital supplies, and automotive supplies. Moglix is one of the many startups handling the business-to-business e-commerce space in India, seen as a huge market ripe for disturbance after firms like Flipkart grew in the consumer-facing e-commerce domain.

Some of the B2B e-commerce firms in India include Udaan, Infra.market. Jumbotail, Ninjacart and ShopX.

For FY19, the latest period for which its financials are available to the public, Moglix’s revenue increased threefolds to Rs 217 crore from 62.4 crore, while its losses grew substantially from Rs 28.06 crore to 48.08 crore.

Presently it has an annual revenue run rate of $120 million, or about $10 million in monthly revenue, said another person close to the company, requesting anonymity.

“The valuation is a little crazy, but it is a result of market momentum. Anyone who is showing the ability to execute without burning cash massively can raise money at a premium,” the above person added.

The COVID-19 pandemic also helped boost demand for Moglix. In addition to companies buying online more frequently, Moglix also began selling pandemic-related safety items including gloves, masks, and Personal Protective Equipment (PPE) kits.

In April 2020, it also launched services in the UK and other parts of Europe, but data about how deeply Moglix has penetrated the market or which products it is selling there is unclear.

The deal is expected to close in the next few months making Moglix India’s fifth unicorn of 2021 after insurance firm Digit, software-as-a-service firm Innovaccer, fellow B2B retailer Infra.market and lender Five Star Business Finance.

2020 produced a record 12 unicorns, and at the current rate, 2021 could be another record year for unicorn creation. Moneycontrol wrote on March 21 that with a rise in internet users during the pandemic, startups are growing faster than ever and VC firms with billions to spend have resulted in a deal-making frenzy.

Falcon Edge, founded by Rhodes scholar Navroz Udawadia has emerged as an increasingly active investor in Indian startups. It is an investor in firms including ride-hailing firm Ola, news aggregator Dailyhunt, and fantasy sports firm Dream11 among others.