MaxWholesale, a mobile-based B2B grocery supply chain, has raised $1 Mn in Pre-Series A round of funding led by Indian Angel Network (IAN) and Maple Capital Advisors.
IAN investors include Ambarish Raghuvanshi, Raman Roy, Sunil Munjal, amongst others. Bikky Khosla of Tradeindia, Pankaj Karna, and Abhinav Grover of Maple Capital Advisors, among others also participated in the round.
Raman Roy, co-founder and Board member of IAN and lead Investor in MaxWholesale said, “There is a tremendous opportunity for a company like MaxWholesale. Currently, there are more than 7 Mn stores in India and the packaged consumer goods market of India is more than $40 Bn. MaxWholesale is leveraging the power of technology with state-of-art logistics management to leverage this opportunity. They have shown phenomenal growth in a short span of one year.”
The startup will use the fresh funds to fuel growth and tech innovation.
The MaxWholesale Origin Story
MaxWholesale was founded in April 2016 by Samarth Agrawal (IIT Delhi alumni and Columbia University) and Rohit Narang. Owned by 99 Algorithms Pvt. Ltd, the startup acts as a medium between retail store owners and large companies. Through this platform, sellers can buy inventory for their stores.
As per an official statement, MaxWholesale has developed a self-operated ecommerce platform to connect FMCG companies directly with small kirana stores.
The company in an official statement said that “FMCG retail in India is highly fragmented with
92% of it being deemed as ‘unorganised sector’ being run by family-owned mom and pop stores. There are more than 7 Mn neighbourhood convenience stores in India, also known as kirana stores. These stores carry thousands of SKUs and deal with hundreds of suppliers on a
weekly basis for replenishment. MaxWholesale’s eWholesaler model provides facilities like better assortment, convenience, pricing, and fulfilment services.
Samarth Agrawal said, “It has just been a year and we have received a phenomenal response from our retailers as well as the FMCG companies. We are seeing an organic growth of 40% MoM. Our retailers love our product and we have a very high repeat order rate.”
The company claims to be working with more than 1,000 retailers in Delhi. With this capital infusion, the company is also planning to scale operations and cater to more than 10,000 retailers over the next few quarters.
How It Works – B2B Ecommerce
Leveraging on its GPS-based routing algorithms, MaxWholesale creates dynamic replenishment routes every day. This helps to reduce time to delivery from the current average of up to two weeks, to less than 24 hours. This allows a quick refill of SKUs for retailers and reduces inventory cost.
The MaxWholesale automation engine captures and processes complete trade data at each level. This improves product availability and cost effectiveness of the supply chain. The company claims to be powering online wholesale for more than 90 FMCG companies including the likes of like Cadbury, Dabur, Patanjali, Capital Foods, P&G, HUL, etc.
In July 2016, the company raised $150K (INR 1 Cr) in a Seed round of funding. The investment was led by investment bank Maple Capital Advisors, Abhinav Grover (Director at Maple Accelerator), Ridhish Talwar, and investment bankers from New York.
The Indian online grocery market is estimated to reach $40 Mn (INR 270 Cr) by FY‘19 growing at a CAGR of 62% from 2016 to 2022. As per reports, India’s B2B ecommerce industry is poised to grow to $700 Bn by 2020. In April 2017, it was reported that homegrown ecommerce unicorn Flipkart was planning to enter the grocery category again. Amazon also has plans to open food retail stores in India. Other players in this segment apart from MaxWholesale include StockIn, BigBasket, and ZopNow.