Sahil Baghla, co-founder, Bluegape.com, the online fan merchandise retailer, on how his company raised funds from Letsventure.com and how he plans to utilise those funds
On 9th January 2014, when Sahil Baghla, the co-founder of Bluegape.com, the online fan merchandise retailer, received a phone call at 1 AM, it was like a dream-come-true moment that every entrepreneur hopes for. It was a call from an investor in New Jersey who had gone through his investment pitch and wanted to dwell into it further. “What ensued was a one hour long conversation from 1.30 AM in the morning. By next day 10.00 AM, he, along with seven other investors, agreed to fund the business,” recalls Baghla, when asked about how his company got funded by LetsVenture.com.
LetsVenture.com was founded by Shanti Mohan, Sanjay Jha and Manish Singhal, as an online platform to enable startups to raise seed or angel money from accredited investors. Baghla came to know about LetsVenture through one of its co-founders, Manish Singhal, who was also an IIT Kanpur alumnus (all three founders of Bluegape.com are IIT Kanpur graduates).
Bluegape.com was the first company to present a pitch on the website and the first company to get funded too. In fact, the founders haven’t met five out of the eight investors who invested in the company. “Each of these investors invested around Rs. 2 lakh to Rs. 40 lakh. And, every month, we share a monthly progress report on the number of transactions recorded and the profit margins,” he states.
The funding was completed in two months and by February 2014; it raised Rs.1.56 crore from these investors. “We’ll be using these funds to strengthen back-end technology and setup physical stores,” indicates Baghla. The offline stores, in the form of kiosks, will enable customers to get a feel of the products being sold online. “We will initially start with Delhi and later expand into other regions. We’ve partnered with Crossword to roll out these kiosks and typically, each kiosk requires an investment of Rs. 10 lakh,” shares he.
In August 2011, when Sahil Baghla and Ayush Varshney found a business opportunity in creating and selling fan merchandise (posters) online, their first 1,000 posters sold like hot cakes. How? Because they were still students at IIT Kanpur and the customers were mostly students within their campus. The real challenge came when the trio took the venture national. During the first year of operation, thrice, they had less than Rs. 1,000 in their bank account and had to pay salaries to four employees on board. “Unlike within a campus, where we personally went to hostel rooms, sold posters and collected payments immediately, everything from acquiring customers and shipping a product to collecting payments involved significant costs,” recalls Baghla, the co-founder of Bluegape Lifestyle Pvt. Ltd (the company that owns and operates bluegape.com). It was in 2012 that the startup got selected for the Times Internet Ltd. managed TLabs accelerator program, and received a cheque for Rs. 10 lakh. “We used these funds to setup an office, create digital inventory and strengthen the team,” says Baghla.
In May 2013, the company raised its second round of funding, for an undisclosed amount, from Aniket Khera (fund manager at Wegmans Financial Services Ltd), Rahul Bhatia (portfolio manager at Willow Investment Management, LLC) and Aloke Bajpai, co-founder of ixigo.com. “These funds helped us stabilise operations for the next six months. The focus during this period was to build supply chain and logistics, and to bring more brands on board,” states Baghla.
Bluegape.com partners with brands such as Warner Bros, IPL, Krrish 3 and 9X Media, and offers their merchandise on its website. It also has a customisation tool and follows a low-inventory model as it handles only on-demand printing. It is currently a 30 people strong company and records close to 800 transactions per day. Typically, it retails its products through bigger ecommerce sites such as Flipkart, Amazon and Snapdeal. “These companies charge us on a per transaction basis. Partnering with them helps us reach a wider audience segment and popularise our own brand name,” states Baghla.
By the end of July 2014, Bluegape.com hopes to touch revenues of Rs. 2 crore per month. “Over the last two years, the ecommerce market has grown significantly and more people are tending towards online shopping. We see this as a key growth driver for our business, going forward,” states Baghla, on an ending note.