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Retail company V-Mart Retail has acquired direct-to-consumer (D2C) fashion brand LimeRoad in an all-cash deal of Rs 31.12 crore. The sale is likely to help V-Mart strengthen its online presence through LimeRoad’s userbase of five crore online shoppers in tier II and III markets.

This also comes at a time when the fashion startup is struggling to keep up with competition from online players like Amazon, Flipkart, and Myntra. So far, LimeRoad has raised over $50 million from marquee investors like Matrix Partners, Tiger Global Managementand Lightspeed India Partners.

V-Mart will also invest Rs 150 crore to help LimeRoad achieve profitability, it said in a statement. The listed entity currently has a network of 450 stores across the country, while LimeRoad is said to have achieved over two lakh downloads per day along with a gross merchandise value (GMV) of Rs 700 crore. GMV is a commonly used term that refers to the total value of goods and services sold over a period of time by a retail company.

LimeRoad will operate as an independent entity under the V-Mart label and the startup’s CEO Suchi Mukherjee will continue her role.

“V-Mart is one of the strongest players in the value retail segment fulfilling fashion needs of masses across India. With this acquisition we aim to not only acquire digital first millennials but build our Omni-channel expertise,” said Lalit Agarwal, Managing Director of V-Mart Retail Ltd.

The completion of the transaction is subject to necessary approvals and conditions from regulatory authorities, the statement noted. Metta Capital acted as an exclusive financial advisor and Saraf and Partners acted as legal advisor to V-Mart for this transaction.