Merisis - Consumer Newsletter - Q2 FY 2016
Merisis - Consumer Newsletter - Q2 FY 2016
Q2
FY2016
Mumbai
Bangalore
Indias consumer packaged goods and retail sectors may not be able to sustain the
high growth path solely on consumption-led demand in the wake of structural
bottlenecks, as per FICCI report.
Consumer Goods
& Services
The online grocery market in India is growing at 25-30% annually in metropolitan areas
and large cities and only 5% to 8% of all grocery stores are organized corporations.
Hence, its a challenge for companies to get local mom and pop or kirana stores on
board due to existing gaps in technology and integration
E-Commerce
Large ecommerce players looking at aqui-hiring - not just for skilled people but for
innovative ideas
Indian financial services firms delivered the second-highest return on invested capital
for private equity firms during 2009-13, according to a study by McKinsey & Co
Finanzbranche
RBIs decision to grant 11 payment banks license and 10 small banks license in this
quarter is likely to see more deal activity. 9 out of the 10 entities that received the
RBIs in-principle license for small finance bank might have to raise an estimated INR
4,000 crore ($606.2 million) from domestic investors to bring down their foreign
shareholding to 49%
Gesundheitswesen
The healthcare segment is gaining traction as it has attracted foreign funds to the tune
of USD 3.37 billion in January-July 2015
The education market in India is worth USD 100 billion annually. Ed-tech startups are
contributing to a changing trend in education in India
Real-time book updates, online tutoring, edutainment and online test preparation are
some of the business models through which education startups are trying to cater to a
larger audience. Using technology they have been able to reach tier II and tier III cities
Bildung
Govt. of India approved a proposal to bolster ties between India & Germany in higher
education sector in the field of research, skill development & faculty development
9%
2%
386
382
1,068
10%
1,383
52%
22%
1,425
248
Information Technology
Financials
Consumer Services
Health Care
Industrials
Others
5%
5%
9%
16%
338
1,150
615
66%
220
E-Commerce
Financials
Health Care
2%
39
247
31%
629
787
1,817
10%
15%
Information Technology
Financials
Energy
1,852
1,554
22%
Consumer Services
Health Care
Utilities
129
Industrials
Materials
5%
17%
32%
E-Commerce
Financials
43
41%
71
255
Snapdeal
Snapdeal raised $500 million valuing them at $4.8 billion post money, funding
led by SoftBank and new investors Wonderful Stars Pte and Alibaba on Aug 18,
2015
Funds will be used to increase the number of merchants on its site to 1 million,
from about 150,000 today
Oyo Rooms
The $100 million deal values Oyo at around $400 million post money, funding
led by new investor SoftBank and existing investors Sequoia, Lightspeed, &
Greenoaks on July 14, 2015
Funds will be used to expand the size of its network to 50,000 rooms across 100
cities by the end of this year, develop innovative technology products and up
customer acquisition and for expanding into Asian countries
The deal will help L&T Finance raise capital to allow L&T to divest some of its
holding, meet its capital adequacy requirements, & for growth capital purposes
at CAGR 25% over 3 years
Pepperfry
The $100 million was a Series D funding round led by new investors Goldman
Sachs & Zodius Advisors and existing investors Norwest and Bertelsmann India
on July 27, 2015
Funds will be used to expand its logistics footprint in Tier-3 & Tier-4 cities by
adding to its growing fleet of delivery vehicles, open new distribution centers,
expand assembly services, strengthen its technology platform and experience
centers
Practo Technologies
The $90 million deal values Practo at $525 million post money, funding led by
new investor Tencent Holdings, Sequoia Capital Global Equities, Google Capital,
Sofina Socit, Yuri Milner, Altimeter Capital and existing investors Sequoia
India and Matrix Partners on Aug 6, 2015
USD 90 million
Funds will be used to expand product lines, acquire more startups, enhance
headcount, increase its lead in the doctor discovery business, accelerate its
international expansion.
Fairfax already holds 9% stake in IIFL through one of its investment through the
HWIC Asia Fund and after the transaction will end up holding 35% , thus greater
than the promoters shareholding of 29.8%
Equity Value/Book Value = 2.4x
P/E = 13.1x
USD 84 million
Thomas Cook acquired Swiss tour operator Kuoni Group's business in India &
Hong Kong for INR 535 crore as a part of its strategy to scale up the inbound
business & explore Asia opportunity
Thomas Cook will take in about 1,800 employees of Zurich-headquartered
Kuonis business unit in India and Hong Kong.
EV/Revenue = 2.76x (Historical 2014)
USD 30 million
The Royal Bank of Scotland Plc. entered into a definitive agreement to sell its
Indian private banking unit to Sanctum Wealth Management, a company led by
the head of the business, Shiv Gupta in a management buyout transaction on
July 27, 2015 for an undisclosed financial disclosures
The deal was primarily to pull back from some foreign markets and to focus on
UK retail and commercial banking. It will retain its private banking business,
onshore clients and staff and will retain all branch networks currently operated
by RBS India (Private Banking)
USD 20 million
Funds will used to enter the interior design and modular kitchen business and
investing in creating augmented and virtual reality options on its site.
Valuation - $26.7 million
Notable PE Transaction
Company Overview
Angel Round
(Mar 2014)
Series A
(Sept 2014)
Series B
(Mar 2015)
Series C
(July 2015)
$0.65 million
$5 million
$24 million
$100 million
Lightspeed
Venture Partners
and other
institutional
investor
New: Sequoia
Existing Investors:
DSG Consumer
Partners,
Lightspeed
New : Softbank
Group
All existing
Investors
participated
All existing
Investors
participated
Business Model
It has developed an asset-light business model. It partners with hotels with the aim of standardization on various
measures in each room including free Wi-Fi and breakfast, flat TVs, spotless white bed linen, branded toiletries, 6-inch
shower heads, a beverage tray and similar amenities
OYO doesn't own any of these properties, and instead, invests in marketing and management quality improvement for
the hotels under its fold. It's a win-win for OYO and the hotels, many of whom just don't have the network, knowledge
or the budget for smart marketing, and they run empty. OYO helps them improve their yields.
Competition
Company
Merisis Opinion
Amt Raised
Investoren
USD 36 Mn
Orios Venture,
Tiger Global
USD 6 Mn
Saif Partners,
Matrix Partners
USD 5 Mn
Accel Partners,
Kalaari Capital
USD 3 Mn
Mangrove Capital
OYO rooms is a first mover & a leader in the rebranded budget hotels space. OYO has displayed how
un-organized, offline business can move to the
organized online space and take advantage of
business potential that the connected digital world
has to offer. The success of OYO has resulted in the
creation of a new category in India and led to a flurry
of new entrants into the space.
Yet, there are still a lot of un-organized spaces in the
Indian market waiting to be structured through
collective branding/re-branding and technology.
Thomas Cook (India) Ltd., Indias premier integrated travel and travel related
financial services company has signed a definitive agreement with Kuoni
Group to acquire Kuonis Travel businesses across India and Hong Kong in
entirety for a consideration of Rs. 535 crore. The acquisition will be financed
through equity infusion, internal accruals and debt
The Kuoni brand is licensed to the acquirer for one year in India and for five
years in Hong Kong. Thomas Cook will pay Rs. 320 crore to add consumertravel brands such as SITA, SOTC and Distant Frontiers to its portfolio in India,
overtaking Cox & Kings to become the top player in customized holiday
bookings and the balance Rs. 215 crore for Kuoni's Hong Kong travel business
As part of the acquisition, Thomas Cook (India) Ltd will take on approximately
1,800 employees of Kuonis business unit in India and Hong Kong tour
operating, and will continue to run the business activities independently
The acquisition of Kuonis Indias travel operations gives TCIL access to their 21
owned offices and 85 franchisees
Deal Value
EV/Revenue
EV/EBITDA
USD 84 Million
2.76x
17.7x
(Historical 2014)
(Historical 2014)
Deal Rationale
Kuoni Group had announced its intention to sell tour businesses in India and other parts of world to focus on online
travel, destination management and visa processing services
This acquisition is expected to help TCIL, essentially a fragmented player in the travel industry, to strengthen its
inbound and outbound tour offerings and consolidate its base in the market
The deal gives Thomas Cook the scale and will help in better contracting and improve margins
The acquisition of Kuonis HK business will give Thomas Cook (India) a foothold in China as HK is considered Chinas
gateway
Merisis Opinion
The acquisition is part of Thomas Cook strategy to scale up the inbound tour business and expand in foreign markets
With this acquisition Thomas Cook would become the largest tour operator in both inbound and outbound segments
Also like other companies, Thomas Cook faces challenges from online travel companies that are growing at a fast rate.
This acquisition also allows the company to face the challenge
Amt Raised
Investoren
USD 11 Mn
Sequoia, Nexus,
Blume
USD 8.8 Mn
USD 1.6Mn
USD 1.3 Mn
USD 0.7 Mn
NA
Accel Partners
Particulars
Details
Orios Venture,
Zomato
Haresh Chawla,
Oliphans, Zomato
Rs.480 - 700
Lightspeed
Rs.750 - 850
-Rs. 50 370
12-14
Rs.40-50
Merisis Transactions
10
On-Going Transactions
Holiday Planner
Indias only holiday planner which technologically enables users to Discover, Plan and Book their trips online
on a single platform at once, is seeking to raise funds
Food Logistics
Indias leading a Food logistics company providing last mile delivery using technology to ensure operational
execution is seamless
Restaurant POS
One of Indias leading technology back-bone software to restaurants, connecting them to the digital world
creating a Food-tech Ecosystem, is seeking to raise funds
Home Shopping
One of Indias biggest Television shopping e-commerce company, is seeking to raise funds
Fresh Juices
A chain of retail outlets serving fresh, healthy, on the go juices, is seeking to raise funds
11
Equity Syndication
M&A
USD 15 Mn
Undisclosed
USD 4 Mn
PE Investment
By
Acquires
Series A
Investment by
October 2015
January 2015
April 2012
About Merisis
Merisis Advisors, a leading independent advisory company, helps growing companies raise capital
from institutional investors as well as advises owners and funds exists from their investments and
maximizes the value of their portfolio. Merisis Advisors focus areas are Technology, Consumers and
Industrials and its experienced team provides deep domain expertise in these verticals as well as a
strong commitment to client. With offices in Mumbai and Bangalore, Merisis Advisors helps its
clients through the complex process of fund raise and M&A, and deliver on its promise of Growth
Simplified. Merisis is the Indian representative of AICA, a global alliance of independent advisors
with presence in 25 countries.
For more information visit
www.merisisadvisors.com
Sumir Verma
Fazal Ahad
Managing Director
Director
Email: [email protected]
Email: [email protected]
504 Shashmira Centre, 176 Vidyanagari, CST Road, Santa Cruz (East)
Mumbai 400098
www.merisisadvisors.com