Pepperfry secures $100M from Goldman Sachs

By | July 28, 2015
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Pepperfry Funding - Main Feature 1Pepperfry secures $100 million funds from Goldman Sachs Group Inc. The investment bank made its first bet in the Indian market by investing in the rapid growing e-commerce company. Pepperfry manages a marketplace working closely with nearly thousand merchants who display their skills, craftsmanship and service orientation to customers across the country.

TrendSutra Platform Services P Ltd owns and operates Mumbai based Pepperfry was founded in 2011 by Ambareesh Murty and Ashish Shah, ex-employees of eBay executives. The company commenced their operations in 2012 by giving customers a wide selection of economically priced furniture, home and living products with consistent quality.

Pepperfry Funding - Main Feature 2Pepperfry has reached 300 cities in India and plans to expand in tier 3 and tier 4 cities in the country. To achieve the company has ramped its logistics department by adding 300 vehicles and increased distribution centers to 15 – 20 cities. With the funding, Pepperfry like to increase their fleet size and significant investments will go for technology, engineering and marketing.

Ambareesh Murty is the founder and Chief Executive Officer of the Pepperfry. He has graduated in Bachelor of Engineering in Civil Engineering from Delhi College of Engineering in 1994 and went on to do his Masters of Business Administration in Management from Indian Institute of Management, Calcutta in 1996.

Pepperfry Funding - Main Feature 3He began his career as a brand manager in Cadbury India. Ambareesh was responsible for flagship brands like Dairy Milk and Five Star. He conceptualized a new brand called ‘Temptations’ and new product development and gifting segments. After working for 5.5 years, he moved out of the company in October 2001. He became Vice President – Marketing and Customer Services in ICICI Prudential AMC Ltd. He had a brief stint in the company for 23 months. In August 2003, Ambareesh became a brand leader for Levi Strauss India Ltd for 5 months.

In December 2003, Ambareesh founded Origin Resources. The company is into training of mutual fund advisors and channel intermediaries of Indian Mutual fund industry. After 18 months, he became Marketing Manager – Mass Markets for Britannia Industries, he managed communication development, retail strategy and innovation for the company. After working for 7 months, Ambareesh became Director – Marketplace Development and User Experience in eBay India in December 2005. After working for 2.3 years, he became Country Manager for eBay India, Philippines and Malaysian regions in eBay. He worked with eBay for 5.7 years and in June 2011 left the company to found Pepperfry.

Pepperfry Funding - Main Feature 4Ashish Shah is co founder and Chief Operations Officer of Pepperfry. He has graduated in Bachelor of Engineering in Chemicals from the University of Pune in 1998. Ashish has Advanced Diploma in Materials Management from Institute of Management Technology, Ghaziabad in 2004.

Ashish started his career as Branch Sales Manager in Tradox Pigments and Chemicals in 1998. He worked in the company for 16 months and moved to India as Regional Manager – North in 2000. He worked with the company for a year and became an associate consultant in C1 India P Ltd in February 2001. He provided corporate consulting in spend management, e-procurement, reverse auctions and other services in the company.

Pepperfry Funding - Main Feature 5Ashish left the company in 2002 and became Manager – B2B Procurement in He worked with the company till August 2004. He headed Sales and Operations of eBay Motors India in October 2002. Later he became Business Head for the same division in April 2008, handling Indian and Philippines countries. Prior founding Pepperfry he was working as Business Head – eBay Motors and Head of Social Shopping for 7 months.

Pepperfry secured their Series ‘A’ funding for $5 Million from Norwest Venture Partners in 2011. Norwest Venture Partners provided another $8 Million as Series ‘B’ in April 2013. The company was funded by $15 million as Series ‘C’ funding from Bertelsmann India Investments and Norwest Venture Partners. Pepperfry secured their Series ‘D’ funding of $100 million from Goldman Sachs, Manipal Group’s Ranjan Pai and T V Mohandas Pai and Zodius Capital. Avendus Capital advised the company on the new round of funding from the new investors.

Pepperfry Funding - Main Feature 6Goldman Sachs Co-Head – Private Equity Ankur Sahu said “Goldman Sachs continues to back high-quality local entrepreneurs to build significant businesses that create and deliver value to the everyday lives of the country’s young, billion plus population.”

“We will benefit tremendously from the global insight of Goldman Sachs and the business savvy of Zodius as they join the Pepperfry board. The investment will help us expand our presence and invest in strengthening our operations.”  He further added “We will utilise the fresh capital to expand our logistics footprint in tier III and Tier IV cities by taking our fleet of delivery vehicles from 350 to 1,000 in the next 12 months. We are also looking at quadrupling our technology and engineering team with a focus on leveraging augmented reality on mobile to further enrich the buying experience. We should have about 500 people by then,” said Pepperfry’s Founder and Chief Executive Ambareesh Murty.

Pepperfry Funding - Main Feature 7As part of the deal, Goldman Sachs and Zodiac Capital directors will join the board of Pepperfry. The market is high unorganized and less than 5% of the businesses are online. According to Pepperfry, estimates the market pegs around $32 billion and grows to $71 Billion by 2020.

Pepperfry is directly competing with Ratan Tata and Sequoia Capital backed Urban Ladder and LivSpace, the company offers different niche product offerings such customizable kitchens, wardrobes, entertainment vanity units. Furniture segment has already in the eyes of online marketplaces of Flipkart, Snapdeal and Amazon. These companies are tying up with leading home retail brands like HomeTown and HomeStop to capture a larger pie in the furniture market.

Pepperfry Funding - Main Feature 8Higher Margins and Big ticket size of around INR 10,000 to INR 12,000 make vertical businesses lucrative for Pepperfry and Urban Ladder. According to Harminder Sahni, Founder of Wazir Advisors “They have their own brands, own merchants and run their own promotions. If you sell your own brands, the margins can be as high as 60-70%. Besides, they have a significantly high lifetime value for customers, which can run into a few lakhs.” 

Author: Venu V

i look for minute details, whatever i do. Avid reader, read lot of Hindu mythology, Technology and General news. Extreme foodie and like to taste new types of vegetarian food. Travel a lot, like to explore new places which are not explored by anyone. Participate in adventure sports like river rafting, grappling and hot air ballooning.