Social commerce platform Rozana.in announced today that it has raised $1.5 Mn in funding led by IEG Investment Banking Group, Germany through its newly formed venture arm IEG India 12 Apostel.
Founded by Ankur Dahiya, Adwait Vikram Singh, Mukesh Christopher, and Prithvi Pal Singh, Rozana.in focuses on peer commerce which looks at building exclusive partnerships with peers who wield community support (offline and online) to leverage the social network and the community for the expansion of the market.
Prior to founding Rozana.in, the founders had made a successful exit from Routier after the company was acquired by Ebix, a NASDAQ listed company in 2018. Routier leveraged AI and tech to aggregate small and medium sized truckers and provided a tech based solution to large B2B customers like Reliance, Asian Paints, Coca Cola, Pepsi, and Mother Dairy.
“IEG backs Rozana.in due to its strong execution team in B2B logistics, high growth, margins, and disruptive business model in a very fragmented market. We have watched Ankur and Adwait closely in their last startup Routier which grew 500%+ with a successful exit to EBIX within 2 years,” says Mihir Kapoor, managing partner, IEG India.
According to the statement from the company, Rozana.in delivers its products in just 2 to 3 hours after the order has been made. Hyper localsourcing is another key pillar of Rozana.in’s business model. They source products from their network of hyper local B2B sellers rather than dealing directly with the brands. The company stated that this allows them to operate an asset light model by keeping minimal inventory at hand and passing on maximum margins to their exclusive agents.
Currently, the platform has launched in Delhi, Noida, Greater Noida, Lucknow and Barabanki. It now plans to expand to Bangalore, Gurgaon, Ghaziabad, Hyderabad, and Chandigarh as a next step with the raised capital.
The growing number of internet subscribers and smartphone users across the country and the Indian government’s proactive digital drive have facilitated this possibility of a network of sales representatives in tier-2 and tier-3 regions too. Moreover, the potential adoption of 5G in Indian regions is only going to help this market grow. As of 2020, the number of internet users in India has reached 700 Mn+. Also, WhatsApp has more than 400 Mn users across the country while Facebook had about 250 Mn users in India in 2017.
In the new commerce segment, which includes social commerce and other creator-driven platforms, Rozana.in is competing with the likes of companies such as Meesho, Shop101, CityMall and OneCode among others. The Indian startup ecosystem is seeing a rising wave of social commerce ventures. For instance, recently, OneCode raised $5 Mn in funding led by Sequoia Capital India’s Surge accelerator and Nexus Venture Partners, with participation from WaterBridge Ventures.
According to a recent report by Sequoia Capital India and Bain and Company, the next biggest driver for Indian ecommerce will be social commerce, which could scale at a compound annual growth rate (CAGR) of 55-60% to $16-20 Bn gross merchandise value (GMV) by 2025. According to the report, the startups in this space clocked a GMV of $500-700 Mn in FY 2019-20.