Corner Store Commerce Site raises $75 million from Avatar Ventures & Others
Elasticrun is a Deep-Reach Logistics Platform that is enabling India's next wave of consumption. The latest round, valued at $400 million post-money, will help the company extend its reach into rural markets.
“We want to expand our network to onboard at least a million retail outlets over the next 12-18 months and we need money for that expansion, besides spending on technology development,” said co-founder Saurabh Nigam.
Its one-of-a-kind model allows its customers to reach consumers who would otherwise be inaccessible through traditional logistics networks. Elasticrun is using mobile technology to link Kirana stores and other small businesses to build an asset-light logistics network.
In 2016, Kalaari Capital and Norwest Venture Partners invested $2 million in the company as seed funding. In 2017, as part of its Series A round, it raised $5 million from the same investors. In 2018, the two funds invested $8 million in the company's Series B round.
In 2019, Avataar Ventures and Prosus (formerly Naspers) joined the team, while Norwest exited with a $40 million main and secondary fundraising.
More than 100 brands, including HUL, P&G, ITC, Marico, Britannia, Colgate, Nivea, Patanjali, and Dabur, have partnered with the Pune-based company to enter 125,000 retail outlets across the world.
“The company’s focus on using deep technology to address the need for commerce marketplaces has helped them scale rapidly, delivering much broader distribution for consumer product brands, while also creating a level playing field for the kirana (corner) stores – giving them parity with competing e-commerce players in terms of reach and product selection,” said Mohan Kumar, managing partner at Avataar Venture Partners.
ElasticRun, which was created in 2015 by Shitiz Bansal, Sandeep Deshmukh, and Saurabh Nigam, also works with banks and non-banking financial companies including RBL, Mintify, and CashKumar to help them finance unbanked retailers who are looking for a less expensive way to fund their businesses. . “We are in talks with other banks and NBFCs to partner with them as well,” Nigam added.
The firm, which aims to hit 10 million kirana shops, provides logistical support and last-mile delivery to e-commerce giants including Amazon and Flipkart. According to Nigam, the company's current sales run rate is about $350 million and is projected to surpass $1 billion in the next 12 months.
India has over 12 million kirana shops, with ten of them in rural areas, where revenues are projected to reach $600 billion in the next five years.
Due to the high-cost systems of conventional distribution networks, their distance from towns, and limited order sizes, these rural stores remain underserved by consumer brands.
ElasticRun provides kirana shops with a variety of physical and digital facilities.
“Over the last 18 months, our consumer products and food business serving the rural kirana shops has seen dramatic growth. The Covid-19 pandemic has enhanced focus for many brands towards rural markets, and our model has enabled us to deliver real value to them and grow our brand basket significantly,” co-founder and CEO Deshmukh said. “We expect 2021 to be our biggest year yet and are looking to more than triple our business over the next 12 months.”
ElasticRun's team has weathered the strong headwinds caused by the pandemic, according to Ashutosh Sharma, Head of Investments for India at Prosus Ventures.
“Due to their focus on delivering value for all their partners, they are entering 2021 in a very strong position for continued growth,” Sharma added.