Mukesh Ambani Led Reliance Retail Acquires Omnibus Furniture Seller Urban Ladder For Rs.182 crImage via Urban Ladder/Facebook

Mukesh Ambani led conglomerate Reliance Industries Limited (RIL)'s subsidiary Reliance Retail Ventures Limited (RRVL) has acquired 96 per cent shareholding in omnibus furniture selling startup Urban Ladder for 182.12 crores, reports Livemint.

Further, as a part of the deal, RRVL holds the right to acquire the remaining shares and extend its holding in the startup to full cent per cent. Meanwhile, as of now, RRVL has proposed to make a further investment of Rs 75 crore into Urban Ladder by December 2023.

Urban Ladder had posted revenues of INR 434 Cr, INR 151.22 Cr and INR 50.61 Cr and net profit/(loss) of INR 49.41 Cr, INR 118.66 Cr and INR 457.97 Cr in FY 2019, FY 2018 and FY 2017 respectively.

Eight years old, Urban Ladder as a startup operates a digital platform for home decor products and furniture. It also operates a number of retail stores in several Indian cities. As of 2018, the company was valued at a staggering sum of Rs 1,200 crore. However, the valuation had been on a decline since.

The latest acquisition by RRVL is part of its strategy to pursue the inorganic route to expand its offerings by means of acquisitions. In the bygone month of August, RRVL had acquired a majority stake in online pharmaceutical firm Netmeds for a sum of Rs 620 crore.

With the acquisition of Urban Ladder, RRVL has entered the hotly contested online furniture market in which competing firms Amazon and Walmart backed Flipkart is also vying for a greater share. Meanwhile, startup Pepperfry is the market leader in the space.

Urban Ladder has been facing operational challenges due to inability to raise additional funding to sustain operations. In the early part of 2019, the company laid off at least 40% of its workforce as part of cost rationalisation exercise.

The entry of Swedish furniture major IKEA has further toughened competition for Urban Ladder.

Till June 2019, Urban Ladder had raised a funding to the tune of Rs 835 crores ( $112.8 million.)

The furniture market in India is worth about $20 billion, of which nearly 90 per cent is unbranded.

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