2007 Founded
2011 Serie F Funding round US$230M Temasek participated
2012 IPO abandoned
2014 Serie G Funding round US$100M Temasek particpated
VANCL is a Chinese online retailer. It started off specialising in cheap but smart looking men's apparel. Cheap and good -- as if that's possible. In 2010 it carried out a series of outdoor advertisements to promote its brand image. The advertisements were well thought out and very successful. Its sleek copywriting created a unique subcultural identity for Vancl. The advertising blast went viral and garnered for it a cultish following of sorts. It came into mainstream prominence and its web traffic exploded. Soon it became one of the top online e-commerce stores, although still miles apart from the giants like Alibaba and Tencent.
In 2011 Vancl went on a step up expansion drive to target several hundred % increase in revenue to 10B Yuan. It added ladies' apparel, kiddies, grandmas and grandpas, toothpastes, armpit scrubers and what have you. There was no more differentiation. With rapid expansion came quality problems. Soon it was inundated with issues, basically of poor management. Customer experience was badly impacted by poor delivery fulfillment and bad merchandising. Revenue was badly affected and losses piled up. The company was forced to abandon the 2012 IPO.
The 2011 expansion drive is a typical trick of startups. The business model is not about building profitable pathways. The game is simply about revenue building. High revenue numbers translate to high valuation and high IPO price, thus providing investors and founders a profitable exit.
For the next 3 years Vancl laid low and went off the radar of venture capital scene. Hardly anything was heard of Vancl. Then in 2014, Chen Nian, the CEO and founder, decided to make a comeback. Employee count was drastically reduced, it sold off its delivery unit, 50% of its merchandise were sold off, international delivery was stopped. A wounded Vancl managed to raise a further US$100M funding in the year.
It is not known how much Temasek poured into the 2 rounds of funding. Vancl is a shadow of what it once was. It is now probably profitable as a small ecommerce outfit but nowhere near the US$3B valuation it once had. It has fallen off the plate of most investors and for those already locked in, there does not appear to be a path to exit any time soon. Unable to exit, Temasek is forced to pump in good money after bad money in the 2014 funding round.
Check out Portfolio Compilation
2011 Serie F Funding round US$230M Temasek participated
2012 IPO abandoned
2014 Serie G Funding round US$100M Temasek particpated
VANCL is a Chinese online retailer. It started off specialising in cheap but smart looking men's apparel. Cheap and good -- as if that's possible. In 2010 it carried out a series of outdoor advertisements to promote its brand image. The advertisements were well thought out and very successful. Its sleek copywriting created a unique subcultural identity for Vancl. The advertising blast went viral and garnered for it a cultish following of sorts. It came into mainstream prominence and its web traffic exploded. Soon it became one of the top online e-commerce stores, although still miles apart from the giants like Alibaba and Tencent.
In 2011 Vancl went on a step up expansion drive to target several hundred % increase in revenue to 10B Yuan. It added ladies' apparel, kiddies, grandmas and grandpas, toothpastes, armpit scrubers and what have you. There was no more differentiation. With rapid expansion came quality problems. Soon it was inundated with issues, basically of poor management. Customer experience was badly impacted by poor delivery fulfillment and bad merchandising. Revenue was badly affected and losses piled up. The company was forced to abandon the 2012 IPO.
The 2011 expansion drive is a typical trick of startups. The business model is not about building profitable pathways. The game is simply about revenue building. High revenue numbers translate to high valuation and high IPO price, thus providing investors and founders a profitable exit.
For the next 3 years Vancl laid low and went off the radar of venture capital scene. Hardly anything was heard of Vancl. Then in 2014, Chen Nian, the CEO and founder, decided to make a comeback. Employee count was drastically reduced, it sold off its delivery unit, 50% of its merchandise were sold off, international delivery was stopped. A wounded Vancl managed to raise a further US$100M funding in the year.
It is not known how much Temasek poured into the 2 rounds of funding. Vancl is a shadow of what it once was. It is now probably profitable as a small ecommerce outfit but nowhere near the US$3B valuation it once had. It has fallen off the plate of most investors and for those already locked in, there does not appear to be a path to exit any time soon. Unable to exit, Temasek is forced to pump in good money after bad money in the 2014 funding round.
Check out Portfolio Compilation
View an attempt to list Temasek portfolio with links to microblogs of troubled assets such as these. It's a work-in-progress that gets updated as and when they are published. If you wish to be updated on new microblogs, simply submit your email in the box on the top, right. Thank you.
No comments:
Post a Comment
Appreciate comments that add knowledge to the subject. Please participate within bounds of civility. Admin reserves the right to moderate comments. In any exchange, seek WHAT is right, not WHO is right.