Online deals site CashKaro has raised Rs. 25 crore from Kalaari Capital in its Series A funding. CashKaro was launched in August 2013 with a funding of $750,000 from a group of UK-based investors who worked as senior executives in companies such as Paypal, Investec and Goldman Sachs.
CashKaro enables its consumers to save and earn money in 3 ways – by comparing prices, getting free coupons and availing cashbacks. The Gurgaon based Online cashback and coupon site works with ecommerce sites including biggies such as Snapdeal, Myntra, Jabong, Flipkart and Amazon. These portals offer a net margin ranging from 2 to 3% to cashback and coupon sites for redirecting traffic to their sites and converting the same into purchases. The incentives are given through coupons and cash back.
CashKaro plans for the future
CashKaro plans to use these funds to expand internationally and for technology upgradation. “We will use the money for international expansion in markets such as Indonesia, Singapore and other nations in southeast Asia,” said Swati Bhargava, CEO at CashKaro. The company claims to have credited over Rs 20 crore as cashback to users on its site in the last two years.
Since the business model is simplistic which requires minimal working capital, there are over 2 dozen such sites in India. However not many have succeeded in raising venture capital, since the margins are wafer thin with few exit opportunities.
According to Rajesh Raju, MD at Kalaari Capital, “The ecommerce market in India will grow upwards of $100 billion over the next decade. There are billion dollar cashback businesses globally and we believe CashKaro can achieve similar scale in Asia. He has plans to launch and IOS and Android App in 2016.