NRN’s bet on Amazon faces rough weather

BENGALURU: A star venture capitalist recently lauded Infosys founder N R Narayana Murthy as the smartest e-commerce investor in India. He was referring to the Murthy family’s joint venture with Amazon. The JV emerged as a dominant seller on the e-tailing giant’s online marketplace.

Cloudtail India — operated as a 51:49 JV between Catamaran Ventures, which is the family office of the Murthys, and Amazon — will be one of the hardest hit entities after the government’s latest directive on clamping down on the monopoly of top sellers on e-commerce marketplaces. The latest policy lays down that no single vendor or their group companies can have more than 25% of the sales on a platform.

Cloudtail has become the largest seller on Amazon India’s platform, generating at least 40% sales, and its share in some specific verticals were even higher. The entity posted a loss of Rs 31.7 crore on revenues of Rs 1,145 crore in FY15, but was expected to turn profitable this fiscal as the Amazon marketplace gathered momentum.

In an emailed response to TOI, Arjun Narayan, MD of Catamaran Ventures, said, “We do not foresee any shareholder or abrupt business changes to Cloudtail, which is a 100% subsidiary of Prione Business Services. Prione and Cloudtail together have been very successful in bridging the gap between Indian SMEs and Indian consumers online. Neither company has a need or desire to maximize metrics like revenue or GMV. It is still Day 1 for e-commerce in India, and 100% of the team’s energy is focused on generating moments of delight for customers and merchants.”