ElasticRun India escalates $75 million to grow its commerce platform for neighborhood stores

Pune-based ElasticRun said it has raised $75 million in its Series D financing round co-led by existing investors Avataar Ventures and Prosus Ventures. Presented investor Kalaari Capital also participated in the round, which takes the four-year-old startup’s to-date raise to $130.5 million.

Millions of locality stores that point to large and small cities, towns, and villages in India and have confirmed tough to strike for e-commerce giants and super-chain retailers are at the center of a new play in the country. An attain of e-commerce companies, offline retail chains, and fintech startups are now sprinting to work with these mom and pop stores as they look to tap an enormous unexploited opportunity.

ElasticRun helps merchants in service these stores, who normally have to spend a few days a month visiting bigger cities to secure inventory, get reliable and more affordable goods directly from big brands. (Big brands love this because this enables them to significantly expand their reach.) These store owners also splurge a number of hours a day not doing much when the business is slow. ElasticRun is also addressing this by partnering with some of the major e-commerce firms including Amazon and Flipkart to exploit this workforce to make deliveries to customers. (E-commerce firms find value in this because neighborhood stores have a larger presence in the country, can reach a customer much faster, and also often have their own inventory.)

Ashutosh Sharma, Head of Investments for India at Prosus Ventures, states, “TechCrunch that ElasticRun has built a variable capacity, crowdsourced delivery model, which distinguishes the startup from other players in the market that have a fixed number of people on payrolls making these deliveries. He said as the startup has developed the railroads, a number of new opportunities have unlocked. One such opportunity is providing working capital to these neighborhood stores. Their operators typically don’t have savings and need to sell the existing inventory to secure funds to refill the stock. In recent years, ElasticRun has struck partnerships with banks and NBFCs to provide credit to these merchants.”

Shitiz Bansal, co-founder, and chief technology officer of ElasticRun, states, “ElasticRun today operates in over 300 cities in nearly all Indian states. The startup works with over 125,000 neighborhood stores and plans to expand to reach 1 million in 18 to 24 months. The startup’s current run rate is about $350 million, a figure it plans to grow to over $1 billion in the next 12 months.”

“The new financing round has also enabled the startup to offer early employees access to “tangible benefits” of the firm’s growth over the last five years,” said Saurabh Nigam, co-founder, and chief operating officer.