Qoo10 CEO Ku Young Bae
Singapore-based e-commerce company Qoo10 has acquired ShopClues, an online marketplace in India, for US$70-100 million, The Economic Times reports.
This an all-stock deal is the culmination of a prolonged hunt for a buyer by ShopClues, which at its peak was valued at US$1.1 billion in late 2015, says the report citing three unnamed sources.
Qoo10 has confirmed the development to e27. “The deal that is happening is a merger, not an acquisition. We understand the confusion in terms, but we would like to clarify it as such,” a Qoo10 spokesperson said.
The deal is not completed yet. As part of the buyout, Qoo10 will also acquire Momoe, the payments arm of Clues Network, parent of ShopClues.
Commenting about the deal, Ku Young Bae, CEO, Qoo10 Singapore, said: “Both Qoo10 and Shopclues share a common objective of continuously building their business and developing seamless cross-border e-commerce in Asia. ShopClues has built a differentiated position as a value-for-money marketplace and has demonstrated capability in reaching Tier II, III, IV cities in India. We highly value this reach and the strong ecosystem of small and micro-merchants that ShopClues has built in this short time, and we believe that both Qoo10 and Shopclues are in prime positions to fully leverage each other’s strengths.”
“Qoo10 is firmly focused on building a strong cross-border business in Southeast Asia and similar to ShopClues has built a strong entrepreneurial culture. This partnership represents a great opportunity for customers to get high quality, value-for-money products globally, and for merchants on both Shopclues and Qoo10 to sell globally with ease,” Sanjay Sethi, CEO, ShopClues, said.
Qoo10 operates localised online marketplaces across Singapore, Indonesia, Malaysia, China and Hong Kong.
ShopClues was founded in 2011 by Sandeep Aggarwal. Unlike other marketplaces, which tend to focus on mobile, electronics, computers and branded fashion, ShopClues mainly focusses on unstructured categories. The firm is backed by GIC, Tiger Global, and Nexus Venture Partners.
The e-commerce company had a tumultuous past as its co-founders fought with each other over several issues, including an illicit relationship. In September 2017, Sandeep filed first information report or FIR (the equivalent of Writ of Petition) against his co-founder-wife Radhika Aggarwal and CEO Sanjay Sethi, accusing them of criminal conspiracy to kick him out of the company.
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This came almost six months after Aggarwal accused Radhika of stripping his voting rights at the company and having an illicit relationship with Sethi. In a series of Facebook posts, he had also accused her of “intentionally and deliberately kicking out other founding team members by collaborating with once illicit love affair partner” and “changing web history, tempering with Wikipedia and lying in the press.”
The problem between the couple started when Sandeep, a former equity analyst at US-based financial services firm Collins Stewart, was arrested in 2013 by the FBI over insider trading charges. According to the investigation agency, Sandeep tipped off Richard Lee, a portfolio manager at hedge fund SAC Capital about a pending deal between Microsoft and Yahoo. Sandeep was consequently banned by the US Security and Exchange Commission (SEC) from trading after he pleaded guilty. He was later released on a US$500,000 bond until trial.
After a few months, he came back to India. Upon his return, he found something wrong in the company and that his wife deliberately avoided him. He grew suspicious about her behaviour, as she appeared more close to Sethi.
Sandeep claims that he founded ShopClues in 2010 using his personal savings. Radhika and Sethi were hired later as Vice Presidents. Sethi was later inducted as Co-founder. When Sandeep was arrested in the US, he nominated Sethi as the new CEO to the Board and Radhika to be a Board member.
When he came back to India in August 2014, Sandeep claims, he found that ShopClues changed Sandeep’s right to nominate a board member way back in April 2014 and he was kept in dark by the two.
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