Jaypore, a curated marketplace for crafts and artisan-based products, is planning to go for a Series B round of funding to raise $15 million.

The funds will be primarily used for its offline retail foray as the firm intends launching company-owned stores in the metro markets of Mumbai and Delhi by next year.

“We will be ready to hit the road for funding next year to raise $10-15 million as part of Series B. Typically in Series B, the stake offloaded is 15-20 per cent. Our existing investor, Aavishkaar Venture Fund, is also expected to participate in this round,” said Puneet Chawla, CEO, Jaypore.

With a GMV(gross merchandise volume) of ₹100 crore, Jaypore has already raised $8 million from Mauritius-based Aavishkaar and Haresh Chawla, former CEO of Network 18.

“Raising money is not going to be easy since investors are now asking tough questions. We have been around for five years and have efficiency in our operations. These factors will play to our advantage while raising our next round,” he added.

Jaypore is also hoping to break even by next year as it gets ready to launch its first brick-and-mortar store. “Our first store will measure about 3,000 sqft and will be company-owned. In the past, we have had exhibitions and pop-our stores. We want to avoid having franchises since we want to control the entire experience of shopping at the store.”

Challenges overseas

However, despite 25 per cent of its sales coming from the overseas markets, Jaypore is not planning to take its stores overseas. “`There are retail challenges in the overseas markets. We have realised there is enough demand for our products from the domestic market and our target is consumers in the 30-35 age group in Tier I cities in India,” Chawla said.

However, there is increasing competition in India, where the unorganised artisan-based crafts and handicrafts segment pose several challenges to the organised players.

“Apparel is our largest category and we compete with the likes of Anokhi, Good Earth and Fabindia. Our wares are also available on Myntra and Amazon and our average ticket size is ₹4,000. But the handicrafts and handloom sector is still largely unorganised,” he added. Besides, GST has been a big blow for the handloom sector which had been earlier exempt from taxes. For instance, some of the smaller artisans and craftsman from whom Jaypore sources its products, have now been slapped with taxes as high as 28 per cent for categories such as leather.

GST impact

“We directly source from about 300 artisans who have never filed their tax returns before. While our input costs have gone up after GST, we are trying to protect the margins of the weavers and artisans and at the same time try holding on to prices.”

Jaypore is now planning to broad base its offerings. While it will continue to source from the handloom and SME sectors, the firm is also looking at ways to address a bigger clientele, comprising the youth, with western designed apparel, to protect its margins post GST.

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Published on September 13, 2017