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‘Objectives fulfilled’: Amazon, Murthy’s Catamaran to end Cloudtail parent JV next year

The announcement after the supreme court rejected a plea by amazon and flipkart seeking a stay on a probe by the cci into their business practices, paving the way for the antitrust regulator to look into various allegations levelled by sellers on these platforms..

Amazon and Infosys founder NR Naryana Murthy-owned Catamaran Ventures have decided to discontinue their joint-venture partnership for Prione Business Services — the parent company of Cloudtail India, one of Amazon India’s biggest sellers.

“Prione Business Services Pvt. Ltd, the joint venture between Amazon and Catamaran, has been running successfully for the past 7 years and comes up for renewal on May 19, 2022. The two partners today announced they have mutually decided to not continue their joint venture beyond the end of its current term,” Amazon and Catamaran said in a joint statement.

The announcement came on Monday, hours after the Supreme Court rejected a plea by Amazon and Flipkart seeking a stay on a probe by the Competition Commission of India (CCI) into their business practices, paving the way for the antitrust regulator to look into various allegations levelled by traders and sellers on these platforms. For years, sellers on platforms like Amazon and Flipkart have been complaining the preferential treatment provided to certain large sellers on these marketplaces, particularly the ones that have a relationship with the platforms.

Responding to a specific query by The Indian Express on the reason of the decision, an Amazon India spokesperson said: “Both the partners believe that the primary business objectives of the JV have been fulfilled. Hence, the JV partners have decided to not renew the JV.” Further, when asked about the next course of action, the spokesperson said: “Catamaran and Amazon have mutually agreed to not renew the JV and partners will decide the next steps.”

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In addition to Cloudtail, Amazon also has a partnership with the Patni Group, through which it operates another major seller on its platform Appario Retail. In February 2019, following the industry department issuing the Press Note 2, asking online marketplaces with foreign investment to not have relationship with sellers on their platforms, Amazon had reduced its stake in Prione Business Services to 24 per cent from 49 per cent earlier. Catamaran’s stake in Prione then rose to 76 per cent from 51 per cent. At the same time, Amazon had also reduced its stake in the Appario Retail JV to 24 per cent.

“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally,” Amit Agarwal, global senior VP and country head-Amazon India, said.

In June, the Consumer Affairs Ministry had announced draft amendments to the Consumer Protection (E-commerce) Rules, significantly tightening the rules for online marketplaces. Shortly after the announcement of the draft amendments, Commerce and Consumer Affairs Minister Piyush Goyal had reprimanded e-commerce firms for “forum shopping” to delay sharing information with the CCI. “A number of these large e-commerce companies have come into India and very blatantly flouted the laws of the land in more ways than one…I’ve had several engagements with these large companies, particularly the American ones, and I can see a little bit of arrogance,” he had said.

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CCI approves Amazon’s acquisition of Catamaran’s stake in Cloudtail parent

Cloudtail was formed when amazon entered a joint venture with narayana murthy's prione business services, which began offering goods on amazon.in after it was set up in august 2014..

• Updated Mar 09, 2022, 9:35 PM IST

The Competition Commission of India (CCI) on Wednesday approved Amazon's acquisition of Catamaran Ventures' entire stake in Prione Business Services Pvt Ltd. Prione Business Services houses Cloudtail, one of Amazon.in's largest sellers.

The CCI, via a tweet, said, "Commission approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited."

Commission approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited pic.twitter.com/7QdZRFRhc5 — CCI (@CCI_India) March 9, 2022

Cloudtail was formed when Amazon entered a joint venture with an entity formed by one of India's most famous tech moguls, N.R. Narayana Murthy, which began offering goods on Amazon.in after it was set up in August 2014.

However, last year in August, a joint venture between Amazon and Catamaran that controlled Cloudtail was coming up for renewal on May 19, 2022, but the two sides said in a joint statement they had mutually decided not to extend it beyond that date.

Besides, Cloudtail had been controversial, with Indian brick-and-mortar retailers for years accusing Amazon of giving it preferential treatment which hurt smaller retailers.

Earlier in January this year, domestic traders' body CAIT had filed a petition before the anti-trust agency to block the transaction that has been entered into by Amazon where it will acquire 100 per cent shareholding in Cloudtail.

The petition provided evidence to show Cloudtail charges less fees/ commission and is a preferential seller on the platform, and with its 100 per cent acquisition, Amazon will cause an adverse effect on the market.

"CAIT has today filed a petition before the Competition Commission of India seeking to block the transaction which has been entered into by Amazon where they will acquire 100 per cent shareholding in Cloudtail," it had added.

Cloudtail, in which Amazon holds 24 per cent stake along with Murthy’s Catamaran Ventures (76 per cent), saw its net profit rise by 171 per cent year-on-year to Rs 183 crore in FY21.

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Amazon seeks India antitrust watchdog’s approval to buy Catamaran stake in Cloudtail-parent firm Prione

Amazon is seeking an Indian antitrust watchdog’s approval to buy Catamaran Ventures’ stake in Prione, which operates one of the largest sellers on the e-commerce platform, months after the two firms said they won’t renew their joint venture after May next year.

The announcement comes as a surprise as Catamaran owns a 76% stake in Prione. Amazon earlier held a 49% stake in the company, but diluted it down to 24% to comply with the local laws that prohibit e-commerce firms from having a direct or indirect ownership in businesses that sell on their marketplaces.

In a joint statement Wednesday, the two firms said they are complying with the applicable laws “including all assets and liabilities” to close the deal and have sought the regulatory approval. Amazon has reached out to the Indian watchdog Competition Commission of India for the approval, a person familiar with the matter said.

Billionaire N.R. Narayana Murthy’s Catamaran and Amazon launched the joint venture in the country in 2014. The joint venture restructured its ownership in 2019 following India’s regulatory changes. In August this year, the two said they were ending the relationship.

Who owns Cloudtail? Was it used to sidestep Indian laws. media rarely investigated. What makes us think that the same people are not at it even now? — Anand Lunia, IndiaQuotient (@anandlunia) August 9, 2021

That announcement came after news agency Reuters reported, citing Amazon documents, that the American e-commerce firm had given preferential treatment for years to a small group of sellers , including Cloudtail, and had used them to bypass Indian laws. The Competition Commission of India, separately, ordered an investigation into Amazon and Flipkart last year for allegedly promoting select sellers (those in which they own a stake) on their e-commerce platforms and using business practices that stifle competition. The two firms made an unsuccessful attempt to dismiss the investigation.

“The businesses of the joint venture shall continue under the leadership of the current management and on receipt of regulatory approvals, the board of Prione and Cloudtail will take steps to complete the transaction in compliance with applicable laws,” the joint statement from Amazon and Catamaran said today.

Cloudtail is one of the largest sellers on Amazon in India. It has enabled more than 300,000 sellers and entrepreneurs to go online and has provided 4 million merchants with digital payment capabilities, the two firms said earlier this year.

Long-standing laws in India have restricted Amazon and other e-commerce firms from holding inventory or selling items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms.

India got around to fixing this loophole in late 2018 in a move that was widely seen as the biggest blowback to the American firm in the country at the time. Amazon and Walmart-owned Flipkart scrambled to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect.

In June this year, India proposed even tougher e-commerce rules that, among other things, prohibit Amazon, Flipkart and other e-commerce players from running their in-house / private labels. The new proposal asks e-commerce firms to ensure that none of their related and associated parties are listed on their platforms as sellers for selling to customers directly. (New Delhi has yet to follow up on the new rules.)

Amazon has stakes in a few more third-party sellers, including Appario Retail, which is its joint venture with Patni Group.

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Amazon to end partnership with Murthy's Catamaran Ventures from May 2022

The two partners on monday announced they have mutually decided to not continue their joint venture beyond the end of its current term.

Amazon and N R Narayana Murthy-owned Catamaran Ventures were the two partners

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Cloudtail ceases operations as Amazon, Murthy end JV

This comes against the backdrop of the indian government and its agencies tightening vigil and launching multiple investigations on us e-commerce firms alleging violations of foreign investment rules in retail..

One of Amazon India’s largest sellers, Cloudtail India Pvt. Ltd, will cease to exist in May next year as the N.R. Narayana Murthy-owned Catamaran Ventures and Amazon India break their seven-year partnership. This comes against the backdrop of the Indian government and its agencies tightening vigil and launching multiple investigations on US e-commerce firms alleging violations of foreign investment rules in retail.

Catamaran Ventures and Amazon India will not renew their contract for joint venture Prione Business Services Ltd, the parent of Cloudtail India, leading to the end of its seven-year term on May 19, 2022, according to a joint statement by the two firms on Monday.

Prione, which was founded in 2014, has enabled more than 300,000 sellers and entrepreneurs to go online and enabled 4 million merchants with digital payment capabilities, according to the statement.

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Amazon to end JV with Narayana Murthy's Catamaran Ventures by May 2022

Recently, the confederation of all india traders (cait) had written to narayana murthy asking him to end his partnership with amazon..

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Narayana Murthy Parts Ways With Amazon, Cloudtail To Wind Up Operations By May 2022

One of India’s most controversial business partnerships is coming to an end.

Amazon seller Cloudtail, which was jointly owned by Infosys founder Narayana Murthy’s Catamaran Ventures and Amazon, has said that it will cease operations from May 2022. The move was announced hours after the Supreme Court of India asked the Competition Commission of India (CCI) to continue its investigation into Amazon and Flipkart for misusing their dominance in the Indian e-commerce space. Critics of Amazon’s model have long alleged that Cloudtail helped Amazon circumvent India’s FDI rules around e-commerce.

Cloudtail’s roots were laid as long as seven years ago — Narayana Murthy’s Catamaran Ventures and Amazon had come together to form a Joint Venture in 2014 named Prione Business Services. Amazon owned 49% of Prione Business Services, while Catamaran Ventures owned 51%. Prione Busineses Services then incorporated a fully-owned subsidiary named Cloudtail, which had started off helping smaller sellers sell their products, but soon itself became one of the most prominent sellers on Amazon India. India’s FDI laws permit e-commerce companies to only run marketplaces and not own any inventory, but the joint venture with Narayana Murthy’s company allegedly allowed Amazon to skirt India’s FDI laws by allowing Cloudtail to become a major seller on Amazon’s platform.

Even though Amazon was a minority shareholder in Cloudtail, it exercised significant control over the company. “It is no coincidence that the managing directors, CFOs, key persons are (so-called) former employees of Amazon,” Indian trade body CAIT had alleged in an open letter earlier this year. “Even the majority of board members of Cloudtail are (so-called) former employees of Amazon. (Even though) Narayana Murthy owns a majority of Cloudtail, the board of directors have Amazon in majority,” the letter had claimed. The body had also alleged that Amazon-controlled companies were accounting for 80% of sales on Amazon India in spite of laws not allowing foreign e-commerce companies to sell products directly to consumers.

The rumblings around Cloudtail had grown louder in recent months. In February, Reuters had published a bombshell report by accessing emails between US government officials and Amazon executives, which showed that Amazon had selectively helped a select group of sellers on its platform. The report had also said that two Amazon-controlled entities accounted for 35% of the total sales in India. In June, British newspaper The Guardian had reported that Cloudtail had been hit with a Rs. 56 crore tax demand by Indian authorities. In July, the High Court had dismissed Amazon and Flipkart’s pleas to halt CCI’s investigations.

Indian sellers had also put pressure on Narayana Murthy to end the partnership. “Mr. Murthy has been in cahoots with Amazon through a name-lending arrangement with Cloudtail acting as a front for Amazon’s retail business and defied the objectives of the policies of the Government of India,” the Indian Sellers Collective had written in a letter. “Just for a fixed fee or returns, Mr. Murthy has sacrificed the interests and livelihood of millions of small traders in India and left them at the mercy of Amazon.”

Amazon and Catamaran Ventures have now decided to part ways, and this signals the end of Cloudtail’s operations in India. It has already been reported that Amazon will look to replace Cloudtail with several smaller sellers which will not be controlled by Amazon, and will try to ensure that no one seller becomes unduly influential over the marketplace. But the fact that Amazon was able to seemingly skirt FDI rules for seven long years in spite of local news reports, the attention of international media, and protestations by local traders shows just how much multinational giants with influence can get away with while running their operations in India.

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Amazon and Narayana Murthy’s Catamaran to end joint venture Prione by May 2022

The joint venture partnership between amazon and catamaran had created cloudtail, which was one of the largest sellers on the ecommerce marketplace..

Monday August 09, 2021 , 2 min Read

The seven-year partnership between Amazon and Infosys co-founder NR Narayana Murthy’s private equity and venture capital firm Catamaran will come to an end for the ecommerce marketplace business.

The joint venture between these two firms called Prione Business Services had set up Cloudtail India , which is one of the largest sellers on the Amazon marketplace.

A joint statement from  Amazon  and  Catamaran Ventures  read, "Prione Business Services Pvt Ltd, the joint venture between Amazon and Catamaran, has been running successfully for the past seven years and comes up for renewal on May 19, 2022. The two partners today announced they have mutually decided to not continue their joint venture beyond the end of its current term."

Amit Agarwal, Global Senior VP and Country Head, Amazon India

Amit Agarwal, Global Senior VP and Country Head - Amazon India, said, “ Amazon and Catamaran entered into a JV in the early days of ecommerce in India, with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally.”

The country head of Amazon India noted that this partnership had helped set the direction for ecommerce in India.

Catamaran President MD Ranganath said, “We are happy that Prione has leveraged global best practices for ecommerce in India, created jobs, and provided millions of Indian customers access to a wide selection of products from across the country by leveraging technology.”

According to the statement, the joint venture has enabled over 300,000 sellers and entrepreneurs to go online, and enabled four million merchants with digital payment capabilities , providing these SMBs and merchants access to millions of customers across the country.

The partnership between Amazon and Catamaran had its fair set of challenges, especially regarding the ecommerce regulations. The government had brought in a new set of rules which restricted the volume of business a particular seller can engage with the ecommerce marketplace. This led to changes in the joint venture's structure.

Edited by Kanishk Singh

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Amazon Cloudtail India: Why Did It Shut Down? | Is It Good News for Retailers?

Shikha tyagi.

If you have ever tried to buy or sell products on Amazon, you must have come across this brand “Cloudtail India”. It used to be the largest seller on Amazon in India but has recently ceased its operation.

This joint initiative of Amazon and Catamaran Venture was shut down on 19th May 2022 leading to the end of a seven-year-long partnership between the two well-recognized organizations.

Before announcing the end of the partnership Amazon India announced a 100% acquisition of Cloudtail India. The employees earlier working for the joint venture has been given the option to continue at Amazon or take a voluntary exit.

In this blog, we will discuss everything about Cloudtail India, how it worked and why this successful partnership was brought to an end with mutual agreement between the two parties.

If you are associated with Amazon, either as a seller or a buyer, this is important for you. If you are asking “Why”, keep reading this blog till the end.

What is Cloudtail India? How Did Cloudtail India Work? What Went Wrong With Cloudtail India? Is Shutting Down of Cloudtail India Good News for Retailers?

What is Cloudtail India?

Catamaran Venture is a venture capital firm i.e. it funds the startups or other organizations that require capital. The net worth of the company is around $ 127 million. It is headed by N.r. Narayana Murthy has made investments across high-growth sectors such as technology, eCommerce, healthcare, etc.

Amazon started functioning in India in 2013. It was the time when the online market in India was least developed and Amazon had to work hard to get customers.

For this reason, in 2014, Amazon India and Catamaran Venture initiated a joint venture under the name Prione Business Services. The basic objective of this venture was to bring more small retailers and businessmen online.

This on one hand would help the retailers to expand their market and reach more customers and on the other hand, helped Amazon to earn a reputation and recognition in the country.

Prione Business Services contributed quite a lot to advancing the online market in India. It provided support systems for the retailers or merchants by helping them with issues as small as listing or describing their products on Amazon.

According to the statement, Prione enabled more than 300,000 sellers and entrepreneurs to establish their online market. Also, it helped 4 million merchants with digital payment capabilities .

However, in the same year i.e. 2014, Prione also established its very own subsidiary company in India, under the name “Cloudtail India Pvt. Ltd.” which was engaged in the B2C retail business.

Under Prione’s ownership, Cloudtail worked as an online retailer and by the end of 2020, it was selling over 30 lakh products under multiple categories such as fashion, apparel, appliances, media, consumables, etc. on Amazon.

No doubt, Cloudtail India became the largest seller on Amazon leaving its other competitors behind with a great margin.

How Did Cloudtail India Work?

At present, Amazon has over four lakh sellers and more than two crore customers registered with it.

The normal procedure for retailers to sell their products on Amazon includes registering themselves on the website. After this, the sellers list their products on the website with the price that also includes the profit share of Amazon.

Generally, this profit share lies between 5-25% depending on the product category and price. This share includes commission, fixed fees, and other similar charges.

As the seller has to earn profit by selling these products, some amount of profit share is included in the price of the product due to which the customer has to buy the product at slightly higher rates.

The price of the product further increases as the vendor also has to pay delivery charges to Amazon which start from Rs. 82/- onwards. Moreover, these sellers also have to bear the promotion charges for their product which again adds to the price of the product. Therefore, the prices at which the customer has to buy the products of these brands are quite higher in comparison to what the seller would offer without including these charges.

However, as Amazon had its own equity in Cloudtail India Pvt. Ltd. the company does not pay any commission to Amazon for listing or selling its products. There is no delivery or promotion fee included for any of the products sold by Cloudtail.

Due to this the prices of the products obviously remain quite low in comparison to its competitors. This gave Cloudtail India an edge over other retailers.

Moreover, being the parent company Amazon prioritizes the products sold by Cloudtail India by always listing them at the top of the page. This further increased the sale of products making Cloudtail India Pvt. Ltd. the biggest seller on Amazon.

What Went Wrong With Cloudtail India?

As per the law, India prohibits Foreign Direct Investment (FDI) in inventory-based models for eCommerce. This means that the companies such as Amazon and Flipkart are only allowed to work as a marketplace.

These companies are only permitted to provide platforms to other sellers or merchants or businesses to enlist their products and sell them but they cannot list their own products on the platform.

Due to this legal concern, a number of objections were being raised by other retailers and merchants selling their goods on Amazon about the close partnership between Amazon and Catamaran Venture.

In this regard, the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry issued a Press Note on 26 th December 2018.

This note clearly disallowed the participation of marketplaces in any type of seller activity even through any “Group companies”. This means that these platforms are not allowed to sell their own products on their platform as this would hamper the business of other small retailers.

Here, Group Company meant two or more enterprises that directly or indirectly exercise 26% of the voting rights in another enterprise or appoint more than 50% of the board members in their entity.

To abide by this law, Catamaran Ventures 2019 increased its stake in Cloudtail India from 51% to 76%. Thus, the stake of Amazon in the joint venture was reduced from earlier 49% to 24% later.

Therefore, as Amazon now had only a 24% share in the joint venture, and the law spoke about 26% or more share, Cloudtail India Pvt. Ltd. could still sell products to Amazon without violating any law.

Even after this, the small businessmen and other retailers or vendors on Amazon claimed that the parent company of Cloudtail India Pvt. Ltd., i.e. Prione Business Services was established with the intention to help small retailers and sellers to start their online businesses.

However, as the online market has now gained enough popularity in the country, the target has been fulfilled and the company is no longer required.

In 2019, Delhi Vyapar Mahasangh (DVM) submitted a plea with the Competition Commission of India (CCI) against Amazon and Flipkart.

In this plea, they accused these marketplaces of abusing their market dominance and preferential listing and deep discounting on products sold by selected vendors in which they control indirect stakes.

They alleged that these marketplaces were drawing indirect benefits from these brands indicating a conflict of interest. Due to this, the online market of small businesses is getting hampered as they are unable to efficiently reach their target customers.

In this regard, the Director-General of the Competition Commission of India launched an inquiry for alleged violation of Section 3 of the Competition Act, in January 2020.

To resolve this issue, Catamaran Venture and Amazon India first approached Karnataka High Court and later the honourable Supreme Court of India. However, both the courts stated that the companies should be open to such anti-trust investigations in their business practices.

In the light of this statement, as well as the changing regulatory environment and unfavourable eCommerce operating guidelines, both the companies announced the end of their seven-year-long partnership.

Hence, Cloudtail India was finally shut down.

Is Shutting Down of Cloudtail India Good News for Retailers?

Honestly speaking, Yes. This decision will provide small businesses and other online retailers and vendors a level playing field. Strict regulatory rules were required in this field for a long time which have now been implemented.

This will also reduce the monopoly of these marketplaces to endorse a few specific brands that bring more indirect profit to them.

Overall, the small sellers will be benefitted who will now be able to sell their products in a healthy competitive environment.

With the partnership between Amazon and Catamaran Venture coming to an end, this is certainly an issue of concern for Amazon as it has invested around $ 1 billion in India.

Also, the customers might have to buy the products at slightly higher prices as the subsidiary brand is no longer available to provide the products at the least rates.

However, this will provide equal rights and symmetry to the small businessmen, sellers, vendors, etc. who will now have better opportunities to expand their online market.

Is Cloudtail India owned by Amazon?

No, Cloudtail India was a joint venture with Catamaran Ventures but Amazon has purchased a 76% stake in the company and now Cloudtail is a wholly-owned subsidiary of Amazon.

Is Cloudtail India shutting down?

Yes, Cloudtail India will shut down its operations on May 1.

Who is the owner of Cloudtail India?

Prione Business Services Private Limited was the owner of Cloudtail India.

Why did Cloudtail India shut down?

As per e-commerce regulations, online marketplaces cannot own any direct stake in seller entities which is the reason Cloudtail India has to shut down its operations.

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Cloudtail rejigs ownership structure, to be back on Amazon soon

Cloudtail is no longer a group company of amazon after nr narayana murthy's catamaran ventures increased its stake in cloudtail's parent company prione business services to 76% from 51% earlier.

The Economic Times daily newspaper is available online now.

Nr narayana murthy’s catamaran ventures in talks to pick up stake in udaan.

A minority stake in Udaan will give NR Narayana Murthy’s Catamaran Ventures a foothold in India’s B2B e-commerce space dominated by IndiaMart, JioMart, Amazon Business and Flipkart. It is currently a majority shareholder in Cloudtail, the biggest seller on Amazon India.

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Provisioned Charters for Discriminating Guests

Tell Us Where You Want To Go – We Will Plan The Rest.

Sailing Yacht Charters

Celebrate life with a journey on the water. We help you find a boat & Captain to fit your budget and needs. Plan a getaway.

Yacht Sales

We are licensed and bonded Yacht brokers specializing in the in catamarans by Bali. While our home port is Florida our boats travel From Florida to New England and Back each year to offer qualified buyers the “try before you buy” experience through a variety of charter programs

Captain Services

Buying or selling a boat? Let us help you coordinate your sea trial, survey, and delivery. Tell us what you need. We are here to help. 

About Sailicity Yacht Sales & Charter

Let your journey begin with Sailicity with all-inclusive sailing experiences. We foster the spirit of sailing and craft personalized and unique voyages tailored to discriminating guests. Tell us where you want to go, and we will plan the rest. We partner with an array of dynamic fleets designed to combine luxury lifestyle and the travel freedom of a memorable sailing experience. We have the privilege to provide guests with alternative social gatherings by hosting socially distant events on the sea, making all feel safe and exclusive.

Our Charter Concierge will craft private charters from half-day, weekend, or up to 14-day voyages. We have multiple types of charters; that sail anywhere in Florida along the Atlantic coast in the spring and fall with our Summer base in New England and our Winter Home in the Caribbean. Sailicity’s concierge service removes the headaches of planning and will take care of all the small details with industry-leading experts.

Our mission is to provide you the sailing experience of your dream. Make an appointment to speak to a Charter Concierge at no cost.

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