A year after Flipkart launched its marketplace, e-tailer Myntra will be launching its own marketplace in April. This new marketplace will allow local stores to sell their products on this platform.

Myntra’s plan to start this marketplace is aimed at earning profits and penetrating into expanding its reach in India's smaller towns and cities.

Ashutosh Lawania, co-founder of Myntra, told The Economic Times, "We would like to make a serious effort towards this (marketplace) direction." He expects about a fifth of the company's total business to come from the marketplace over the next one year.

Myntra expects to sign up about 500 vendors within a year of the operations of its marketplace.

Lawania adds that Myntra will continue selling premium and private label brands thorough the inventory model while local brands will be sold through the marketplace.  He said, "For us, both components are very important. In the future, while the (marketplace) could grow and grab a larger slice of the pie, both will co-exist.”

A marketplace model enables e-commerce players to avoid inventory-related expenses, thereby substantially reducing their cash burn. Also these players can continue to receive FDI which is otherwise banned in direct online retail.

Another prominent player in the Indian e-commerce market, SnapDeal, follows the marketplace format.

This announcement comes soon after Myntra raised a funding of $50 Million (about Rs. 300 crore) which was led by Premji Invest along with new and existing investors.

Since its launch in 2007, Myntra has raised close to $75 million from investors, including Accel Partners and Tiger Global.

Myntra is expected to raise yet another round of funding of $50 million, in the next few months. Reportedly talks are on with private equity fund, L Capital and America based, Sands Capital.