CityMall Secures $6.3 Million in Debt Funding

CityMall, a social e-commerce platform focused on grocery shopping, has successfully secured approximately Rs 55 crore, which translates to about $6.3 million, through debt financing from Trifecta Venture Debt Fund and Alteria Capital Fund.

Debt Issuance Details

The board at CityMall has authorised the issuance of 400 series X non-convertible debentures (NCDs) to Trifecta Venture, along with 1,500 series X1 NCDs to Alteria Capital Fund. The face values for these debentures are Rs 10 lakh and Rs 1 lakh, respectively, contributing to the total amount raised.

As indicated in official filings, the funds garnered from this debt will be directed towards the company’s expansion and growth initiatives.

Expansion of ESOP Pool

Additionally, CityMall’s board has broadened its Employee Stock Ownership Plan (ESOP) pool by including 1,03,300 new options, valued at Rs 47 crore. This move elevates the total ESOP pool to 3,73,200 options, worth Rs 171 crore. A separate resolution outlines that for every 100 ESOP options, a single equity share will be generated.

Business Model and Future Plans

CityMall operates by selling lifestyle, grocery, and various everyday necessities via a network of community resellers located in tier II and III cities. The company is also looking to introduce new product categories, including beauty items, through its community reseller network.

Funding History and Market Position

Notably, CityMall has not sought external capital, either through debt or equity, in the past three years. The most recent funding round occurred in March 2022, where the firm raised $75 million, led by Norwest Venture Partners, obtaining a valuation of $320 million. Data from startup intelligence platforms highlight that Elevation Capital holds the largest stake in the company, followed by Accel and Jungle Ventures.

Growth Metrics

CityMall witnessed a 23% increase in its gross merchandise value (GMV), rising from Rs 346 crore in FY23 to Rs 427 crore during FY24. Despite this growth, the company reported a loss of Rs 159 crore in the same fiscal period.

Market Competition

In the competitive landscape, DealShare, a prominent rival of CityMall, has switched to a hybrid model in 2023, moving away from its community group buying approach. The company, backed by Tiger Global, has experienced a significant 75% drop in revenue during FY24.