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Healthkart.com Buys Madeinhealth.com

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As funding starts to dry up in the e-tailing domain, small companies trying to raise Round A of funding are finding it hard to sustain their businesses. Case in point is madeinhealth.com – a body-building and fitness supplement store – which after struggling for nearly six months to raise $2.5-$3 million, decided to sell itself to larger competitor Healthkart.com in an all cash deal. 

Earlier this month, fashion accessories portal Stylishyou.in got snapped by Yebhi.com.

The market is anticipating the Healthkart-madeinhealth deal to be in the range of Rs 20 – Rs 30 lakh.

According to Healthkart.com's founder and Joint Managing Director Prashant Tandon, "this inexpensive deal" will fetch Healthkart a strong data base, online domain, minimal inventory of Rs 1-2 lakh and a Facebook community of fitness enthusiasts.

"Though they (madeinhealth) were unable to scale their business, they managed to build a good online community of fitness enthusiasts, and we are trying to cash on to that," says Tandon, who struck the deal in March 2012.

Madeinhealth.com, co-founded by Jatin Modi and Maniraj Juneja in March 2011 is a concept based on US's bodybuilding.com.

Since March 2011, the company has touched a top line of Rs 1.2 crore. Madeinhealth, which attracts about 1,053 unique visitors per day on its website, get about 20-30 orders a day with an average ticket size varying between Rs 1,500-Rs 3,000. Healthkart.com gets about 25,540 unique visitors a day, according to Hypestat.com.

"We wanted to expand the company and venture into entire health and nutrition category but since January, the scenario had become bleak in the e-commerce domain," says Modi. "Funding has dried up in last four five months especially for the first round of investments," he added.

According to sources, the company was contemplating offers from healthkart, yebhi and firstcry before it closed the deal with healthkart.

The founding team of Madeinhealth – Modi and Juneja -- will not be seen on Healthkart board. However, the remaining 6-7 members have already joined Healthkart business. Healthkart will not wipe off Madeinhealth brand and the website will continue to operate separately though back-end integration will take place.

When asked why Healthkart chose to keep everything from madeinhealth apart from the founding team, Tandon replied: "We did not require any senior management at this point."

However, according to Modi, they got a better offer at Yebhi.com and hence the duo decided to join the fashion and lifestyle portal Yebhi as Associate Vice Presidents. With yebhi.com, the founders have received a joining bonus and some stock of yebhi.com.

Health and fitness category enjoys gross margins of about 35 to 40 per cent.

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