TMRW to sign up investors ahead of IPO

Aditya Birla Group’s direct-to-customer (D2C) startup TMRW is targeting a public listing over the next few years and plans to take its digital-first brands offline in a bid to make deeper inroads into the country’s vast retail market.

The fashion and lifestyle platform founded by group chairman Kumar Mangalam Birla’s son Aryaman Vikram Birla plans to onboard external investors as it prepares for its initial public offering (IPO), said a top executive.

“I think the way we conceptualized this venture is to essentially be backed by the Aditya Birla Group. We will look at other investors who would come in and be part of our journey as we scale this venture from the current stage to the next level, and look at it as a venture that goes all the way to IPO,” Prashanth Aluru, co-founder and chief executive officer of TMRW said in an interview.

TMRW is a wholly-owned unit of Aditya Birla Fashion and Retail Ltd’s (ABFRL). The venture is an attempt at creating a ‘House of Brands’ entity and actively invest in brands that are born online and draw a large part of their sales from online shoppers. While announcing the launch of TMRW last June, the cement-to-textile business house said that the move is in line with the group’s strategy to start and back new-age digital ventures.

TMRW aims to create the largest portfolio of disruptor brands in the fashion and lifestyle space and become part of the D2C growth in India, which is poised to be a $100bn market by 2025. It plans to acquire and incubate over 30 innovative, customer-obsessed brands.

The company has been on an acquisition spree since launch. Last December, after taking a controlling stake in Bewakoof Brands Pvt. Ltd, TMRW invested ₹200 crore to fuel the brand’s growth. Within a year of launch, it has eight brands on board--Berrylush, Bewakoof, Juneberry, Natilene, Nauti Nati, Nobero, Urbano, and Veirdo. It spent a total of ₹289 crore to buy majority stakes in these eight D2C brands in the fashion space.

Aluru said TMRW works as a startup backed by the stability of the larger conglomerate and will eventually “bring in other investors will look for not only capital but also investors who can add value, who can take us all the way to a standalone IPO”.

The IPO plans are, however, “long-term” as some brands are expected to take time before they build an offline presence.

Aluru said the company will also grow omnichannel opportunities—expanding both online and offline presence for its brands. “...in some ways, we want to own the digital opportunity, which is the large e-commerce opportunity. But at the right scale, every brand has to become a lifestyle brand across channel and (go) wherever the customer is,” he said.

“We think there is enough juice left in digital to not venture offline soon. But equally for some brands which are larger in scale, there is always time and place to get into offline,” he added.

TMRW currently has a team of more than 100 people including product engineers and digital specialists.

Several companies have built their businesses around consolidating online-first brands in a bid to grow and scale them up further.

Harminder Sahni, founder and managing director, Wazir Advisors, said the entire aggregator model is built around consolidation. While, the internet has helped ease the entry and creation of digitally native brands; however, several brands struggle to scale beyond a few hundred crores, he said.

“This aggregator model is nothing but consolidation of brands; this happens across sectors. The success, however, will depend on what brands are part of their portfolio and how they manage to scale them up,” Sahni said. The market is also ripe for more such deals as a slowdown plagues the industry.