Incubate Fund Leads Pre-Series A Funding In Chennai’s E-procurement Startup Kobster

Incubate Fund Leads Pre-Series A Funding In Chennai’s E-procurement Startup Kobster

• CAN, ANME, and LetsVenture also participated in this funding round
• Kobster Elite, a cloud based e-procurement tool, is the new bet
• Kobster is further looking to expand to Tier 2 cities

Chennai-based B2B e-procurement platform Kobster has raised an undisclosed amount of funding in a Pre-Series A round led by Incubate Fund.

Apart from Incubate Fund, Chandigarh Angel Network, ANME (Angel Network Middle East), and LetsVenture also participated in this funding round.

Kobster was founded by Karthik Ramaiah, Mohan Gayam, and Vineet Neeraj and was also incubated under PayPal’s Start Tank Programme. It is a full-stack company and focuses on end-to-end solutions, including last-mile fulfilment. Kobster also claims to be operationally profitable.

Kobster’s B2B e-procurement platform enables corporate buyers, retailers, SMEs, home offices, hotels, hospitals etc purchase business products in bulk at wholesale rates. It offers a one-stop-shop platform for all business needs with doorstep delivery, flexible payment options, and 24X7 ordering facility.

Earlier, in 2015, Kobster also raised an undisclosed amount of funding from venture capital firm Splice Capital. The startup also counts among its investors Murugavel Janakiraman, founder and CEO of Matrimony.com, Mahesh Parasuraman,co-founder and partner at Amicus Capital Partners, and Kishore Ganji, CEO of Astir IT Solutions Inc.

Kobster: Bringing Efficiencies In B2B Market

Nao Murakami of Incubate Fund, who is an investor in Kobster, believes that in India, office supply, and the MRO market are highly fragmented and still most of them do offline transactions.

He further believes that this market needs three important things for B2B commerce to grow — high frequency of order, large  ticket sizes, and a high retention rate of customers.

“We looked at Kobster closely and noticed that they have been growing steadily for last 24 months. Also, especially as we are VC fund originally from Japan, we know some successful ventures in this space such as Askl and Monotaro so we are confident on the business model,” he added.

Here are some more facts on Kobster:

  • Currently operational in Chennai, Bengaluru, Mumbai, Delhi/NCR, Hyderabad and Pune.
  • Has partnered with 5000+ brands and vendors
  • Offers over 1 Lakh products across categories like stationary, housekeeping, Pantry, electronics, IT consumable, electrical and others.
  • Claims to be serving more than 100 traditional and new age corporates including companies like Oracle, Altisource, MindTree, Virtusa, Urban Ladder, CoWrks, DB schenker and many more.

Kobster’s Future Plans

Kobster is working towards a vision to streamline the corporate indirect purchases space with the help of their own cloud based e-procurement tool, Kobster Elite. Kobster claims to reduce 15-20% on indirect cost and increase the efficiency by 30-40%.

Mid and large enterprises see a value in switching to digital platforms. In recent times, corporate procurement has become one of the fastest evolving industries (FEI). According to the Global Business and Spending Outlook Survey commissioned by American Express, about 40% of the CFOs surveyed said that they would invest more than they did in 2017 in improving administrative process efficiency, including streamlining financial and procurement processes to help meet business objectives.

Shanti Mohan, founder and CEO of LetsVenture, said, “In India, most of the business procurement happens in the traditional, offline way, and there is huge potential to organize this market and bring transparency in quality and pricing. Kobster founders have proven their mettle by onboarding marquee clients and growing at a steady rate.”

Now, the startup is also looking for a Series A round of funding to fuel its growth and expand to Tier 2 cities, strengthen category offering, build advanced technology features, and go deeper into its customer base.

Author

Team Inc42

Inc42 Staff
Inc42 Magazine is an online startup magazine that covers some of the best startups and entrepreneurs in the India ecosystem. We also feature numerous guest posts and resources by leading experts from across the industry, including many from the Silicon Valley and Bay Area.
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