Reshab AgarwalThe largest company of India, Reliance, acquired Future Retail a while back. And even though the deal hasn’t closed completely it might very soon get executed. So, Reliance became Reliance Retail and is still in expansion mode. As the company seeks to make its presence stronger in the Indian market, it recently acquired a majority stake in Urban Ladder for Rs 182 Crores.
About Urban Ladder
Image Source: Urban Ladder
Urban Ladder is a furniture selling offline and online retailer. The company presently has only 4 stores across Bangalore but provides deliveries in up to 75 cities through its website. The company was founded in 2012 by the co-founders Ashish Goel and Rajiv Srivastava. Both the co-founders worked in other companies before coming together and thus has a lot of experience.
The startup offers over 5000 designs across various categories like bedroom, bathroom, living room and more. During its initial days, the company only had an online presence but shifted to offline too in 2017. As of now, the only founder of the company Ashish Goel is managing the company, as Rajiv Srivastava quit the company in 2019.
Reliance Retail and Urban Ladder’s deal
In the recent deal, Reliance Retail acquired a 96% stake in Urban Ladder. It can even acquire the remaining stake and take the 100% ownership of the company. Urban Ladder raised some serious money in the past amounting to around Rs 700 crores. But in the past two years, the company has struggled a lot to raise capital and managed to get only Rs 15 crores.
Urban Ladder was evaluated at Rs 1,200 crores in 2018, which fell by more than 1/3rd in 2019. From stock filings, we can also see the decline in turnover and profit/loss from 2107 to 2019. This added to the fact that they are not able to raise capital might be the main reason for selling. Reliance also said that they are going to invest up to Rs 75 crores in the company by December 2023.
What does this mean for other companies?
With giant companies like Reliance expanding to almost every sector of the market, it will become tough for small startups and companies to sustain. So we might even see many companies merging and try to compete with Reliance and other similar companies. And there is also a very high possibility that the tight competition in the market will crush many companies.
What do you think Reliance’s move in the furniture market means? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.