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Exclusive: Lifestylebrand Chumbak raises$1.7 mn from Blacksoil,angel investor

14 July, 2017

By Vijayakumar Pitchiah (https://www.vccircle.com/author/vijayakumar-pitchiah/)

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Bangalore-based Chumbak Design Private Limited,

which sells designer-led consumer products, has

raised Rs 11 crore ($1.7 million) via equity and debt

funding between November 2016 and May this year,

filings with the Registrar of Companies show.

In May, it raised Rs 8 crore in debt from Mumbai-

based non-banking financial company Blacksoil

Capital Pvt. Ltd. It will use the funds to meet its

working capital requirements and to expand its

stores, the documents show.

In November last year, it raised Rs 3 crore from

Bangalore-based investor Narayan Ramachandran,

who is operating partner at private equity firm Gaja

Capital and was formerly India head at investment

banking firm Morgan Stanley. Chumbak issued Series

C1 preference shares for this investment, which

could possibly be part of a larger Series C round.

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In March last year, Chumbak’s chief executive Vivek

Prabhakar had told The Hindu Business Line that it

was looking to raise up to $20 million by the first

quarter of 2017 for its planned US foray. The current

status of that fundraising exercise could not be

ascertained.

Prabhakar declined to confirm and comment on the

fund-raise.

Prior to this, the company raised $4.6 million (Rs 30

crore then) in 2014, in a round led by Matrix Partners

with participation from existing investor Seedfund,

previous RoC filings show.

Founded in 2009 by the husband-wife duo of

Prabhakar and Shubhra Chadda, Chumbak started

off as a company making souvenirs.

Gradually, it diversified its offerings across 100

categories, including fashion and travel accessories,

bags and wallets, and decor. In late 2015, it forayed

into the apparel category.

Prior to Chumbak, Prabhakar worked at Sun

Microsystems, Motorola, Fabmart and Titan. Co-

founder Chadda had earlier worked at Nortel

Networks and NetApp.

The company also plans to venture into the personal

care products space, which includes bath and skin

care products, perfumes, cosmetics and toiletries,

according to a board meeting resolution held last

year. However, it is not clear if it has immediate plans

to enter the segment.

A hybrid retailer, Chumbak also sells its merchandise

at 18 exclusive stores across 11 cities in India,

including Delhi, Mumbai, Bangalore, Hyderabad,

Chennai, Kochi, and Jaipur. A media report in October

2016 said the company planned to double the

number of offline exclusive stores to 30 by the end of

2017.

Besides, it also has pop-up stores in prominent malls

across the country.

As an online player, Chumbak sells its products on its

own platform as well as via third-party e-commerce

marketplaces such as Flipkart, Amazon and Myntra.

According to media reports, online contributes 25-

30% of Chumbak’s overall business while the offline

channel accounts for the rest.

In FY16, the company posted 88% year-on-year

growth in gross revenues to Rs 34.94 crore, up from

Rs 18.55 crore in the previous year. But total

expenditure also doubled to Rs 55.53 crore from Rs

27.69 crore in FY15.

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