ElasticRun closes $330 million Funding Round Led By Softbank Vision Fund 2 & Others
The round was also attended by Chimera and Innoven Capital, as well as long-term investor Prosus Ventures.
According to founders and CEO Sandeep Deshmukh, the company's valuation has tripled from $400 million to $1.5 billion following the investment round.
In the next 12 months, ElasticRun plans to extend into rural areas and raise its kirana (corner store) customer base from 500,000 to one million, according to Deshmukh.
The firm, which sells FMCG products to kirana stores, functions as an extension of FMCG firms' direct distribution networks in rural areas, bringing new clients to these brands.
ElasticRun's network of rural kirana stores also assists ecommerce enterprises in reaching clients in remote places.
Udaan, Reliance's JioMart, Flipkart Wholesale, and Indore-based Shop.kirana are among the kirana e-commerce startups attempting to organise the unorganised retail industry.
The fundamental distinction, according to Deshmukh, is that ElasticRun concentrates solely on the rural market.
“The problem in rural areas is that the ticket size is so small, and the distances are so long, that the discounts do not matter but making sure it is available there at the right price point and right cost is the game,” he said.
“If you are to solve for the two equations on the urban side, you have to solve for the deals, on the rural side you have to solve for the fulfillment cost and availability. Rural channel is a fulfillment first network, whereas the urban market is a sales first network. The underlying ecosystem is completely different for both.”
Existing distribution channels have been protesting Udaan and JioMart for allegedly lowering pricing. ElasticRun's strategy, according to Deshmukh, is collaborative rather than disruptive.
“If a brand works with us that means the brand gets half a million stores over and above what they currently serve. There are 8 million stores in the country which have not been served even by the largest brands. For smaller brands that can be 9 million stores,” he said.
By crowdsourcing human resources and cars from diverse channels and sewing together a virtual transportation network, the business maintains an asset-light distribution network.
Former Amazon executives Sandeep Deshmukh, Shitiz Bansal, and Saurabh Nigam started ElasticRun in 2016.
Prosus Ventures (previously Naspers), Kalaari Capital, and Avataar Ventures are among the company's current investors. In April 2021, the company raised $75 million at a valuation of more than $400 million.
According to regulatory records cited on February 7, the company tripled its valuation to become a unicorn after raising financing from SoftBank.
The company has partnered with renowned brands such as Britannia, Coca-Cola, ITC, Tata Consumer, Reliance Retail, Dabur, and Procter & Gamble, according to its website.