Vu Tech to offload 25% stake to PE funds

Home grown maker of LED television sets and commercial displays, Vu Technologies, is planning to offload 25 per cent in the company to PE players.

Valuing the six-year-old company at ₹200 crore, Vu has pitted its luxury television brand against MNC players like LG and Samsung.

Devita R Saraf, CEO and Design Head, Vu Technologies, said: “We are looking at new investors like PE funds with plans of giving away at least 25 per cent stake in the company by early next year. The company has been valued at ₹200 crore as we have some amount of brand equity in the market today.”

The money raised through PE funds would be used to scale up its operations before the World Cup when television sales are expected to peak. Promoted by the Mumbai-based Saraf Family, which also owns Zenith Computers, Vu Technologies has been building its brand all these years without splurging on advertising, unlike its MNC competitors. “We have been spending mostly on the digital medium with an annual ad budget of ₹3 crore while competitors like Sony have been spending ₹350 crore,” she added.

Selling about 40,000 televisions a year, Vu has been sourcing from countries like China and Taiwan and has assembling units, much like the rest of its MNC competitors.

However, unlike the rest of the players in the TV market, it has been relying more on online sales. Vu televisions have nearly 55 per cent of its sales coming from this medium with the brand being available across a host of e-commerce sites from Amazon to Flipkart.

In fact, high rentals at malls have made the brand move away to the online medium where the cost of setting operations is cheaper. “We had to close down some of stores at malls due to high rentals. Online sites charge as low as 6 per cent margin while offline retailers demand huge margins at 30 per cent,” said Saraf.

Having shut down some stores in malls, Vu today is opting for pop-up stores (one-off or temporary stores) at malls apart from resorting to the online medium. “Pop-up temporary stores cost one-fifth the rentals charged by mall owners. Since our TVs do not require ground space, we have re-invented our sales channel,” said Saraf.

It is also nursing ambitions of making the brand global and has been exporting its televisions to the US. “Our ambition is to succeed in the US and if we can do that then we can capture one-third of the world television market,” she added. With a sales turnover of ₹100 crore, Vu Technologies turned profitable two years ago.

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