Chennai-based rural ecommerce startup Inthree has raised $4 mn in a Series A funding round led by Ventureast, with participation from Orios Venture Partners and the IAN Fund.
The startup plans to use the funding to strengthen its technology infrastructure, enhance its capabilities in last-mile logistics, and deepen its penetration in the 10 states where it operates.
Founded in 2013 by Ramachandran Ramanathan, Karthik Natarajan, and Narayanan, Inthree operates under the brand name Boonbox and has an omnichannel business model.
The company claims to have developed the expertise and capability to build and manage the entire commerce ecosystem in rural areas using technology.
It claims to have sold more than 1.5 Mn durables to more than 1 Mn households.
Ramanathan, Karthik, and Narayanan, the co-founders of Inthree, said, “Inthree has always focussed on providing the most appropriate products, backed by home delivery (irrespective of distance) and top class after-sales service. We are delighted to be funded by some of the best names in the industry and plan to utilise the funds to increase scale and strengthen our backend capabilities to delight our customers.”
Earlier, reports had surfaced that the company closed FY 2016-17 with a turnover of INR 50 Cr and has more than doubled its top line in the year ending March 2018 to INR 118 Cr.
Inthree, with its brand Boonbox, has partnered with brands directly and has posted a gross profit of more than INR 2 Cr despite being bootstrapped with internal accruals till recently.
The company last raised funds from IAN in September 2017.
Siddhartha Das, general partner, Ventureast, said, “Boonbox is ushering the next wave of rural transformation by delivering branded products to the doorstep of the rural consumers. By mitigating the friction points around financing, last-mile logistics, and supply chain through technology based solutions, Inthree is pioneering the shift to assisted rural e-commerce. While financial inclusion was aimed at ‘banking the unbanked’, the key breakthrough here is in ‘making the inaccessible accessible’ to the semi-urban and rural population.”
For the end merchant, Boonbox is a platform to establish a foothold in rural markets as it aggregates demand for various products and then places orders with merchants.
The products procured by Inthree goes through the company’s warehouse where it is checked for quality and packaged for despatch to customers’ homes.
Commenting on the investment, Amitabh Shrivastava, managing partner, IAN Fund, said, “India sits on a goldmine in terms of the next set of users who will be transacting online and that will comprise mainly in the rural areas where Internet penetration is 15% and growing exponentially. Inthree is perfectly placed to make most of the upcoming surge in this trend as it has already established itself in the market and has an unfair first mover advantage in this space.”
Rural Ecommerce Industry In India
At present, Indian ecommerce industry is waiting with bated breath for the upcoming national ecommerce policy. There has been incessant activity in the sector, with US retail giant Walmart acquiring Indian ecommerce company Flipkart, US ecommerce major Amazon increasing its bets in India, and search giant Google looking to enter Indian ecommerce and a lot more.
Rural markets have been largely untapped in ecommerce even as players such as Flipkart and Amazon continue to expand their presence in the country.
Satish Meena, analyst with Forrester Research, had reportedly said that the Indian e-tailing market totalled $16 Bn in 2016, rising to $20 Bn in 2017. The only segmentation he offered was a 40-60 split — 40% of the gross merchandise value (GMV) is generated in metros while 60% comes from non-metros.
Catering to Indian rural ecommerce, we have players such as StoreKing, IndiaBuys, among others.
A joint study by Bain & Company, Google, and the Omidyar Network said India’s 500 Mn Internet users have the potential to unlock more than $50 Bn worth of transactions in online commerce in the country.
The report, entitled ‘Unlocking Digital for Bharat: $50 Billion Opportunity’, noted that there is 55% Internet penetration in urban areas versus just 15% in rural areas.
The IBEF expects the Indian ecommerce sector to reach $200 Bn by 2026 and rural areas continue to hold a major key to growth and expansion of this industry.