Scale Labs, a Gurugram-based cross-border ecommerce enabler for brands and online retailers, has raised nearly $ 1 Mn seed funding from GPA Group, led by Vivek Agarwal, said the startup’s co-founder and chief operating officer Pramod Panchagnula to Inc42.
The company will use these funds for development of its technology product and for acquiring an Indian company that has built its fulfilment capabilities in India, Dubai, and Hong Kong.
With over 250 clients from India, China, Singapore, Switzerland, Germany and Dubai, Scale Labs envisions to enable brands by providing them with cutting-edge business services and technology products to address global audiences.
It must be noted that the company has been bootstrapping since its official foray into the cross-border ecommerce fulfilment space in 2016 and has raised funds for the first time.
Why Be A Provider And Not A Player In $33 Bn Ecommerce Industry?
The Indian Economic Survey 2017 pegged the ecommerce market at $33 Bn and there has been an increasing number of deals in the space. Further, according to the Inc42 Indian Tech Startup Funding report 2017, ecommerce startups raised $4.6 Bn from 79 deals, which rose to $786.87 Mn across 49 deals in H1 2018.
Still, Scale Labs chooses to be a service provider rather than a player in the huge ecommerce space. Why is that? Kiran Kumar, co-founder and CEO, Scale Labs, said,
“Back in 2013, we wanted to venture into the international market with a range of India-made khadi products, however, we faced roadblocks like cross-border trade regulations, lack of understanding of the supply-chain dynamics in the global trade and payment repatriation challenges. This is how we started Scale Labs in 2016, with an ideology to create solutions for manufacturers and brands of all capacity to scale their business into global markets.”
Scale Labs Cross-Border Network: 50 Channels, 24 Countries, And More
As a cross-border ecommerce enabler, the company provides multiple solutions to its customers with a team of 45-50 members. So far, Scale Labs claims to have an e-distribution network across more than 50 channels and 16 marketplaces in 24 countries.
The company’s global fulfilment centres are operated by third-party logistics service providers (3PLs). These centres act as an on-demand global warehousing and fulfilment solution on a ‘pay-as-you-use’ model for sellers, brands, and dotcom stores.
These technology-based centres enable brands to automate their global ecommerce operations — from distributing their product feed/catalogues to fulfilment and delivery — all at one place. Here is a glimpse into the different solutions offered by Scale labs to its clients globally:
- ScaleX: A product feed automation tool for brands, it enables sales across multiple online channels
- Scale Ship: A shipping automation tool for brands to fulfil their B2C orders across marketplaces, dot-com stores etc
- Scale Freight: An all-in-one freight solutions comparison tool for brands to fulfil their B2B shipments
Through these models, the company earns commissions of about 5-15% and this has enabled it to clock GMV of about INR 80 Lakh to INR 1 Cr every month.
Going ahead, Scale Labs aims to achieve a monthly gross merchandise value (GMV) of INR 1.5-2 Cr by the end of 2018.
Scale Labs will continue an aggressive approach towards its target regions, namely South East Asia, the Middle East, the Americas and Europe. As Kiran said, “What’s unique about the international markets is that they create a level playing field for brands of all sizes to establish and grow their brand. With a steep growth projected for crossborder ecommerce over the next few years, this is the best time for a brand to establish their footing across the globe.”