[Funding alert] DealShare raises $21M Series C investment led by Westbridge Capital
Jaipur and Bengaluru-based startuphas raised $21 million in Series C funding led by WestBridge Capital. The round also saw participation from Alpha Wave Incubation - a venture fund managed by Falcon Edge Capital, Z3Partners, and existing investors Matrix Partners India and Omidyar Network India. Several independent investors too participated in this round of funding.
DealShare said it will use the capital proceeds for the next phase of its growth, which will include expanding to newer geographies, penetrating deeper into current markets, scaling operations, expanding local sourcing networks, and strengthening its technology platform across business verticals.
Dealshare Founding team
“With this round of investment, we will augment our brand presence across existing and new markets. Over the next one year, we are targeting to increase our footprint to 100 cities and towns across five states. Along with this, we will increase our customer base to one crore. This investment will take us to an annual GMV of Rs 2,500 crore,” added Sourjyendu Medda, Founder and Chief Business Officer, DealShare.
However, the pandemic accelerated DealShare's growth. In a conversation with YourStory, Vineet Rao, Founder and Chief Executive Officer, DealShare, said, the early days of COVID-19 created operational challenges. The team nonetheless was able to work with the governments and get back on its feet.
He said, "What helped was our existing partnerships with local manufacturers and partners. In the early days of the lockdown, there were very few players to do home deliveries in Mumbai and Jaipur. Apart from this, we have also seen an acceleration in demand. Consumers now have understood the importance of online platforms and are here to stay. They realise that they can get better quality products at cheaper prices. Even with things getting back to normal, we believe there is an acceleration and behaviour shift that will continue."
The statement added the company has successfully targeted India’s fast-growing, mid-income demographic of 500 million new-to-internet users. According to Sourjyendu, what helped was the fact that the team innovated on the social commerce side from day one.
"The ecommerce 1.0 model was already operational in metro cities with people adopting Bigbasket, Amazon, and Flipkart. But people in Tier II, III, IV, and V cities behave very differently. They have a friendship and lifelong relationship over generations with the kirana stores. To change that model, we had to look at ecommerce differently," said Sourjyendu, in a conversation with YourStory.
He explained DealShare focussed on an Indian language model and a simplified version of the app that makes it easy for anyone to operate. Everything is in local languages. "It is important to connect with people on the local flavours. We focussed on a kirana like experience, there is no fancy packaging, and the consumer gets the feel of the neighbourhood kirana," says Sourjyendu.
In a press statement shared by the company, Vineet said:
"We plan to use the funds to strengthen our technology platform and talent pool and scale our unique “Made-for-India” solution. Over the last two years, we have witnessed rapid adoption of our app among Tier II and III cities, and will continue with this growth journey.”
The total funding raised by DealShare now stands at $34 million. Founded by Vineet Rao, Sourjyendu Medda, Sankar Bora, and Rajat Shikhar in 2018, the startup is clocking gross revenues of $45 million with $7 million of capital invested.
“Majority of Indian population is currently residing in the non-metros and there is a huge business opportunity in these regions. The buying pattern of low- and middle-income group is different, especially in smaller markets, and DealShare seems to have understood the nuances very well. What has set DealShare apart is its unique business approach, and we look forward to working with the team as they further expand their presence across India”, said Sandeep Singhal, Co-founder and Managing Director, WestBridge.
They started with WhatsApp as their main channel for sales; which soon evolved into the app. The first version of the app was simple – it had a list of products and buy buttons, a simple form for the address, and was available in Hindi and English.
“The latest funding will give us the impetus to strengthen our asset-light model of supply chain and logistics. We plan to strengthen & leverage the local economy and entrepreneurs, especially in Tier II, III, and IV cities of India,” added Sankar Bora, Founder and Chief Operating Officer, DealShare.
The ecommerce startup began by providing more information on products, and soon added options for easier navigation, promotional communication, various incentive programmes, and gamification. DealShare is now operational in 25 cities and towns across five states, including Mumbai, Bengaluru, Jaipur, Ahmedabad, Surat, Baroda, Kota, Jodhpur, Ajmer, Sikar, Sawai Madhopur, and Nagaur.
“DealShare brings together a focused assortment that is differentially procured. This, when coupled with the delight of discovery and a gamified shopping experience, drives robust repeat usage and cohort behaviour. These factors, coupled with creative first principles driven fulfilment, drive exciting unit economics. We are excited to continue backing the company through its growth journey,” said Navroz D Udwadia, Co-founder and Partner of Falcon Edge.
With an average of 1,000 stock-keeping units (SKU) across categories, DealShare delivers about 25,000 orders daily. At present, it has around 1,000 manufacturers and suppliers, of which 70 percent are regional or local.
Tarun Davda, Managing Director, Matrix India, said, “Be it the social-sharing led customer experience, the unique local supply partnerships or the last-mile distribution via kirana stores – DealShare has re-imagined every bit of ecommerce keeping Bharat users in mind. This is the reason the company has been able to break the barriers of adoption and profitability in this segment.”