ElasticRun, a rural B2B online commerce company, has raised $330 million in funding led by SoftBank Vision Fund 2 and Goldman Sachs. Valued at $1.5 billion in the latest round, it has joined the growing list of unicorns in the country. The funding round also saw participation from Chimera and Innoven, as well as existing investor Prosus Ventures, the company said in a statement on Thursday.
The company’s existing investors include Prosus Ventures (formerly Naspers Ventures), Kalaari Capital and Avataar Ventures, which sold a small stake in this round.
ElasticRun enables rural kirana shops to access consumer and food brands through its e-commerce platform. It aggregates warehouses, transporters and micro entrepreneurs on its platform and offers the under-served stores network to brands, mostly FMCG. It covers 80,000 villages across 28 states, servicing close to 1 million kirana shops and has 300 brands on the platform.
Founded by Sandeep Deshmukh, Shitiz Bansal and Saurabh Nigam in 2016, ElasticRun acts as an extended arm of FMCG companies.
The company has a run rate of $1 billion in sales on its platform and has grown 10x in the last one year, Deshmukh, co-founder and CEO of ElasticRun, said. The growth began in May 2020 as the pandemic accelerated technology adoption and demonstrated power of the rural markets. “ElasticRun has become operationally profitable,” he added.
India has over 10 million kirana shops across rural India, of which the best of brands can reach only 2 million, Deshmukh said. The company is able get small retailers on its platform through an app and get a real-time view of their demand and service it from its delivery centres. This year, ElasticRun will reach 1 million stores and plans to go to 2 million in 18-24 months.
“FMCG contributes predominantly to our revenues — this will continue even as we explore expanding to adjacent categories. Over time, we plan to fulfil 65% of the store volume share, of which 45-50% will come from FMCG and 15% from other categories,” Deshmukh said.
ElasticRun identifies taluka places and then penetrate up to 35 km from the taluka. The company does not own or invest in any asset but controls the entire transaction on its platform, Deshmuk said. They crowdsource warehousing, delivery vans and people, and aggregate it on their platform. “We have the most exhaustive retailer stores list. ElasticRun has created a network of micro distributors to service the retailers. “Companies have their own distribution network, we add to that, and extend their reach to an additional network of half a million stores,” Deshmukh said.
Ashutosh Sharma, head of investments, India, Prosus Ventures, said ElasticRun is enabling huge transformation in rural India’s supply-chain ecosystem.
Narendra Rathi, vice-president, SoftBank Investment Advisers, said with its deep reach in rural India and tech-led platform, ElasticRun is well-positioned to unlock the next wave of e-commerce. “Their focus on unit economics and value creation for kirana store partners and brands is impressive,” Rathi said.
ElasticRun has had five rounds of funding so far.
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