What you need to know about Indiamart

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Indiamart.com is eyeing an IPO shortly to raise between Rs500-1,000 crore. Here’s is a snapshot of the firm

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The company was founded in 1996 by Dinesh Agarwal, a former senior system analyst at HCL Technologies.

Indiamart.com, one of the largest online listing platforms for small and medium businesses, is eyeing an initial public offering shortly to raise between Rs.500 crore and Rs.1,000 crore.

The company has just raised an undisclosed amount in Series C funding led by Amadeus Capital.

Here is a snapshot of the company:


The company was founded in 1996 by Dinesh Agarwal, a former senior system analyst at HCL Technologies. Agarwal did his engineering from Harcourt Butler Technological Institute, Kanpur in 1990 and went to the US to work for HCL in 1992.

How it all started

In 1996, Agarwal returned to India after working for 3 1/2 years in HCL’s US office. He was trying to set up his own business at a time when the Internet was launched in India on August 15, 1996.

“I wasn’t sure what exactly, but wanted to do something with Internet,” said Agarwal.

He bought a domain name indiamart.com for $135.

The idea was to build an online directory of merchants who wanted to sell their products abroad. When enquiries would come on the website from foreign merchants, Agarwal’s company would inform the merchants in India via post or fax.

First order

The company got its first order from restaurant chain Nirulas. It managed to rope in 45 customers by March 1997 and the financial year ended with Rs.6 lakh in revenue.

Boom and bust

By 1999, the Internet sector was experiencing a boom. News reports were full of stories about skyrocking valuations of online companies.

IndiaMart was growing too but still not in a position to get into ambitious marketing efforts, unlike many other start-ups. In 1999, Indiamart hit a revenue of Rs.1 crore with Rs.10 lakh profit.

With venture-funded start-ups offering 3x salaries, Indiamart started to witness some serious attrition. The dotcom boom did not last too long. It turned to bust.

“Many of the companies which had hired my employees shut shop. On the other hand, my business started booming. We rehired a lot of those people,” he said.

In 2000, IndiaMart had 100 employees on board.

The company was expanding fast. The rented office space was not enough. Agarwal then aspired to build IndiaMart’s own offices. He raised Rs.1.6 crore from friends, family, employees and through a bank loan to build IndiaMart’s own campus.

Aftermath of 9/11

“We had the bhoomi poojan on September 10, 2011. The next day we woke up to the news of twin tower crash in the US,” Agarwal said.

Overnight the company’s business shrank to half. A good chunk of that was coming from travel companies. The terrorist attacks on the World Trade Center in New York and Pentagon crippled tourism.

“I had a massive loan riding on my head. The only thing that I told myself and the team was to completely focus on the work,” he said.

In the next three years, the company shut sectors such as travel and decided to focus on industrial exports.

“In March 2002, our growth was the slowest. Our turnover stood at Rs.3.25 crore,” he added.

Bouncing back

However, by 2006 the company’s growth momentum was back on track. It reported Rs.18 crore revenue with Rs.5-6 crore of profit. The valuation stood at Rs.200 crore.

It raised Rs.15 crore from Bennett, Coleman & Company Ltd (BCCL) in 2007.

The company however soon suffered another jolt in 2008 when the global financial crisis erupted with the collapse of Lehman Brothers.

Exports dropped and the company’s revenue started to stagnate all over again. “We thus decided to raise money and concentrate on domestic B2B (business-to-business) market,” said Agarwal.

It raised Rs.50 crore from global venture capital firm Intel Capital in 2009.

For the financial year 2010, it reported revenue of Rs.50 crore.

In 2010-11 it started a massive expansion effort across the country. It opened 52 sales offices in 52 weeks. From 300,000 listings in 2010, it grew to 2 million in 2012.

Sensing a big opportunity in the consumer space, the company also launched an online retail marketplace, Tolexo.com, in June 2014.

Agarwal’s brother Brijesh Agarwal spearheads Tolexo. A management graduate from the University of Lucknow, with a masters in business administration from the National Institute of Integrated Learning and Management (NIILM), Brijesh started his career as a supply chain consultant at Miebach Logistics GmbH, Bangalore.

Overall, Indiamart reported revenue of Rs.200 crore with around Rs.25 crore cash positive in 2014.

In March 2015, the company raised an undisclosed amount in Series C funding led by Amadeus Capital. Westbridge, UK-based Quona Capital and existing investor Intel Capital too participated in the round. The size of the round was estimated at Rs.130-140 crore.