Kirana commerce platform ElasticRun has raised $75 Mn in a round led by existing investors Avataar Venture Partners and Prosus Ventures. Kalaari Capital also participated in the funding round.
With the latest funding, ElasticRun has a $400 Mn post-money valuation. The funds will help expand the company’s reach in rural markets.
The company has so far raised over $57 Mn in five funding rounds, before the latest funding round. Its last funding round was a Series C round worth $40 Mn led by Avataar Venture Partners and Prosus Ventures in 2019.
Founded in 2015 by Sandeep Deshmukh, Saurabh Nigam and Shitiz Bansal, ElasticRun’s tech platform acts as an extended arm of FMCG companies’ direct distribution networks in rural areas and enables these businesses to reach small Kirana stores in the hinterland.
ElasticRun also helps widen the addressable market for the FMCG brands that had distribution hurdles earlier, through a network of rural Kirana stores. Besides enabling commerce, it also engages with banks and financial institutions to give them access to underserved SME customers from its Kirana network. Through data analytics, the platform also helps Kirana businesses sharpen their marketing strategy.
The company claims that while an Indian FMCG company’s traditional network would be defined with high operational costs and capital expenditure, ElasticRun’s crowdsourced logistics network requires no working capital on behalf of the partner and introduces variable costs and deeper reach. The platform also does supply and demand aggregation to fulfil the small ticket size of an individual store. The company aims to onboard a million retail outlets over the next 12-18 months.
“Over the last 18 months, our consumer products and food business serving the rural Kirana shops has seen dramatic growth. The Covid-19 pandemic has enhanced focus for many brands towards rural markets, and our model has enabled us to deliver real value to them and grow our brand basket significantly,” cofounder and CEO Deshmukh said. “We expect 2021 to be our biggest year yet and are looking to more than triple our business over the next 12 months.”
The company, which is looking to reach 10 Mn Kirana stores, also helps ecommerce companies such as Amazon with logistics support and last-mile delivery. The company’s current revenue run rate is $350 Mn, but cofounder Nigam said that it would reach $1 Bn in the next 12 months.
ElasticRun claims that by helping businesses reach 10 Mn rural Kirana stores, it is unlocking a $600 Bn consumption opportunity. The company claims to have a presence in more than 500 locations across India, servicing over 100 brands. Some of its clients include Amazon, Brittania, P&G, ITC, Colgate, Himalaya, Dabur, Godrej and Pepsico. In the logistics tech space, ElasticRun competes with Locus.sh, 4TiGO, BlackBuck and MightyFly. Although, these companies have different models and offerings.
According to Forrester Research, India’s retail market was worth an estimated $883 Bn last year, of which grocery retail accounted for $608 Bn. By 2024, the market is expected to grow to $1.3 Tn.