Cashback and coupons site CashKaro is the latest company to join industrialist and angel investor Ratan Tata’s rapidly growing portfolio of startups. The over two-year-old company is Ratan Tata’s third investment of 2016.
Gurgaon-based CashKaro was founded in 2013 by entrepreneur couple Swati and Rohan Bhargava. The same year it raised angel funding of $750,000 from a group of London-based investors. The announcement of Ratan Tata’s investment comes just two months after CashKaro raised Rs 25 crores in Series A funding led by early-stage investor Kalaari Capital.
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The #startup works with over 1,000 online shopping portals like Amazon.in, Paytm, Jabong, and ShopClues. Users who log in to CashKaro and then do their shopping on its affiliate sites get up to 30 per cent additional cashback. CashKaro works on a commission model. The company claims to be the largest cashback site in India with over 10 lakh-registered users and over five million page views a month. The firm, which is targeting to cross Rs 1,000 crore in gross merchandise value in the next few months, also claims to have credited Rs 30 crores worth of cashback to its members.
It is the boom in online retail that has led to the rise of companies like CashKaro. Goldman Sachs estimates Indian e-commerce to reach the $100 billion-mark in financial year 2020. A study by Internet and Mobile Association of India (IAMAI) in 2015 estimated that affiliate sites, which includes cashback firms like CashKaro, account for over 15 per cent of e-commerce sales in India. However, the cashback space is already quite crowded. LafaLafa, GoPaisa and Pennyful are just some of the competitors that CashKaro faces. 500 Startups-backed LafaLafa, which is based out of Hong Kong and India, raised funding from Vectr Ventures in December.
Tata Sons’ Chairman Emeritus Ratan Tata has become the most sought after angel investor in the Indian startup ecosystem at present. In a joint statement Swati and Rohan Bhargava, Co-founders of CashKaro said an investment by Ratan Tata is an affirmation of the opportunity that CashKaro is addressing.
The funding from Mr. Ratan Tata marks another milestone in CashKaro’s three-year journey. We are privileged to have him come on-board as an investor…His expertise and insight will be immensely helpful as CashKaro.com expands to newer markets and pursues an aggressive customer acquisition strategy.
While a star investor alone can only do so much, CashKaro seems to have built a business that has scaled quite rapidly without raising a lot of risk capital. However, it now needs to defend and build upon its lead and that’s what has led the founders to raise equity capital. With strong competition the Bhargavas have their task cut out.
(Disclaimer: Ratan Tata and Kalaari Capital are investors in YourStory)