SoftBank, Goldman Sachs mint unicorn in Indian commerce startup ElasticRun

SoftBank Vision Fund 2 has led a $300 million investment in ElasticRun as the Japanese conglomerate doubles down on its commerce bet in the world’s second largest internet market.

Goldman Sachs and existing investor Prosus Ventures also participated in the Pune-headquartered startup’s Series E round, according to regulatory filings ElasticRun made on Monday. The new round values ElasticRun at $1.5 billion.

TechCrunch reported early last month that SoftBank and Goldman Sachs were in talks to back ElasticRun.

The Pune-headquartered ElasticRun helps hundreds of thousands of neighborhood stores across hundreds of Indian cities and towns secure inventory from top brands and working capital. It collaborates with e-commerce firms and other big brands to help these stores boost their revenues. The e-commerce firms and brands, in turn, gain access to a large market that has historically proven difficult to penetrate.

The new round, which pushes ElasticRun’s all-time raise to over $430 million, brings more capital to the startup than it had raised in all its previous funding efforts combined.

ElasticRun has developed a crowdsourced, asset-light logistics network of partners who deliver the services to the neighborhood stores (popularly known as kiranas). Some of the major firms that work with ElasticRun to tap this network include Amazon, Tata Consumer Products, Coca-Cola, PepsiCo and Reliance Retail, India’s largest retail chain.

The startup is the latest in a series of bets SoftBank has made on India’s commerce market. The firm has also backed Flipkart and social commerce startup Meesho.

Sequoia Capital India looks to double down on commerce startup Bikayi

Bikayi is in talks to raise about $50 million in a new financing round, four people familiar with the matter told me, as the Indian startup looks to scale its platform that helps small businesses set up and run their e-commerce stores.

Tiger Global and Sequoia Capital India are holding conversations with the Indian startup to lead its Series B round, the sources said, requesting anonymity as the deliberations are ongoing and private. Sequoia Capital India, which led Bikayi’s $10.8 million Series A funding in September last year, is positioning to lead the round, two sources said.

Spokespeople for Bikayi, Sequoia Capital India, and Tiger Global declined to comment.

Bikayi allows businesses to collate and fulfil orders from various online and offline sources and accept payment digitally. Its platform also helps businesses set up their e-commerce stores on WhatsApp and also launch their own apps that they can distribute to customers.

The startup additionally maintains partnerships with delivery firms to help businesses ship products to customers. As one of its investors describes it, Bikayi is “building a powerful tool that integrates the entire infrastructure of commerce onto one single platform.”

Several of Bikayi’s offerings are available to businesses at no charge. But it takes a small fee if they wish to broaden their online product catalogs, it says on its website.

“The entire platform has been designed to enable easy integration with other applications to make it a single dashboard for everything the merchants need. It’s even more exciting to see the impact their product is having on small businesses – and the country’s employment rate,” wrote Shraeyansh Thakur, a principal at Sequoia Capital India, in a blog post last year.

Scores of firms, including Reliance Retail (the nation’s largest retail chain), e-commerce giant Amazon as well as startups such as Nexus Venture Partners-backed Jumbotail, Tribe Capital-backed Khatabook and Lightspeed Venture Partners-backed Dukaan, are helping merchants — sometimes in similar, but also in their own unique ways —  digitize their businesses and reach more customers.

DotPe, another startup operating in the space, has amassed over 9 million customers and is clocking $4 million in ARR, according to an investor deck dated last month and reviewed by TechCrunch. The startup, which counts Google and Info Edge among its backers, has facilitated over 26 million transactions, it revealed in the investor deck.

ElasticRun, which is helping hundreds of thousands of neighborhood stores across hundreds of Indian cities and towns secure inventory and working capital, is in talks with SoftBank to raise about $200 million at a $1 billion valuation, TechCrunch reported earlier this month.

SoftBank in talks to back India’s ElasticRun

SoftBank Vision Fund 2 and Goldman Sachs are in talks to back Indian commerce startup ElasticRun, according to four people familiar with the matter. The proposed Series E financing round, whose size is about $200 million, values ElasticRun at over $1 billion, the sources said, requesting anonymity as the deliberations are ongoing and private.

The Pune-headquartered ElasticRun is helping hundreds of thousands of neighborhood stores across hundreds of cities and towns secure inventory from top brands and working capital. It works with e-commerce firms to help these stores boost their revenues.

The five-year-old startup, which counts Prosus Ventures and Avataar Ventures among its existing backers, has raised $130.5 million prior to the new round.

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Sandeep Deshmukh, co-founder and CEO of ElasticRun, talks about the startup at a business conference in 2019.

ElasticRun has developed a crowdsourced, asset-light logistics network of partners who deliver the services to the neighborhood stores (popularly known as kiranas).

Some of the major firms that work with ElasticRun to tap this network include Amazon, Tata Consumer Products, CocaCola, PepsiCo, and Reliance Retail, India’s largest retail chain.

ElasticRun and SoftBank did not immediately respond to a request for comment. On many fronts, ElasticRun competes with the Bengaluru-headquartered e-commerce startup Udaan, which on Wednesday, disclosed a $250 million investment.

If the proposed talks materialize into a deal — at the terms described in this report — ElasticRun will be the latest startup to join the coveted unicorn club.

A handful of investors including SoftBank Vision Fund 2, Tiger Global, Alpha Wave Global and Sequoia Capital have become unusually aggressive in recent quarters and have often fiercely competed to win deals with local young firms. Indian startups raised a record $39 billion in 2021, a year that helped mint 44 local unicorns. SoftBank alone invested over $3 billion in the South Asian market last year.

India’s ElasticRun raises $75 million to grow its commerce platform for neighborhood stores

A startup that is helping over 125,000 neighborhood stores in India secure working capital, inventory from top brands, and work with e-commerce firms to boost revenues said on Thursday it has raised a new financing round as it looks to further its reach in the world’s second largest internet market.

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. Existing 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 neighborhood stores that dot large and small cities, towns and villages in India and have proven tough to beat for e-commerce giants and super-chain retailers are at the center of a new play in the country.

A score of e-commerce companies, offline retail chains and fintech startups are now racing to work with these mom and pop stores as they look to tap a massive untapped opportunity.

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Sandeep Deshmukh, co-founder and CEO of ElasticRun, talking about the startup’s business at a conference in 2019.

ElasticRun helps merchants operating these stores, who typically 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 spend 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 biggest e-commerce firms including Amazon and Flipkart to utilize 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, told 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 has 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.

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, said Shitiz Bansal, co-founder and chief technology officer of ElasticRun, in an interview with TechCrunch.

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, he said.

Saurabh Nigam, co-founder and chief operating officer, said 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.

Inside Prosus Ventures’ $4.5 billion bet on India

Prosus Ventures last week filed a hostile offer for British food delivery startup Just Eat, an attempt to defeat a unanimous rejection from its board and simultaneously fend off a bid from rival Takeaway.

The giant Naspers spinoff said it was willing to pay as much as $6.3 billion in cash to lure Just Eat, one of Europe’s largest foodtech players.

Prosus’ major bet on online food startups shouldn’t come as a surprise; the recently-listed subsidiary, whose parent firm has invested in companies in more than 90 nations, has shown a great appetite for food delivery startups globally.

How deeply Prosus believes in foodtech is perhaps on display in emerging markets such as India, one of the most buzziest nations for the investment firm, where the unit economics doesn’t work yet for almost any internet startup and probably won’t for another few years.

Prosus Ventures’ investments in food delivery startups globally

Last year, South Africa-based Naspers led a $1 billion financing round for Indian food delivery startup Swiggy. The investment firm contributed $716 million to the round, just shy of the roughly $750 million that Swiggy’s chief rival, Zomato, has raised in its 11 years of existence.

TechCrunch spoke with Larry Illg, CEO of Prosus Ventures and Food, and Ashutosh Sharma, head of investments for India at the venture firm, to understand how significant foodtech is for the investment firm and the bets it is making in India.


“We had a thesis on food delivery globally,” said Illg, describing the company’s first search for a food delivery company in India. “We knew that at least one big player will be there in India in the future. We went around the town and spoke to a lot of startups.”

And then they found Swiggy. But, Illg said, it was a very different Swiggy from the one that currently dominates the Indian market. “So here was a food delivery startup that was already profitable. The only challenge was that it was operational in just six cities in India.”

And thus began Naspers’ journey to convince Swiggy to expand its service nationwide. Now operational in more than 130 cities around the country, Swiggy today competes with Zomato, UberEats, and Ola-owned FoodPanda (now known as Ola Foods).

Prosus Ventures’ Sharma, who heads India business, cautioned that it is early for food startups in India. “I want to say we are on day one, but it might as well be day zero. The number of smartphone users in India who are ordering food online is still less than 2%,” he said.

But even this nascent category has attracted some tough competitors. While UberEats and Ola’s Foods are struggling to make a significant dent, Swiggy and Ant Financial-backed Zomato are locked in an intense battle.

Both companies, according to industry reports, are losing more than $20 million each month. Zomato was burning about $45 million each month a year ago, Info Edge, a publicly-listed investor in the startup revealed in its recent earnings call with analysts.

Illg is not really bothered with the frenzy cash burn in India’s food delivery market, and said Prosus has no shortage of cash, either.

That cash might come in handy very soon. A source at Zomato told TechCrunch that the company is in talks to raise as much as $550 million in a round led by Ant Financial .

TechCrunch reported earlier this year that Zomato is quietly setting up its own supply chain to control the raw material its restaurant partners use. Two sources familiar with Zomato say the food delivery startup is thinking of expanding beyond delivering food items.

Earlier this year, Swiggy announced that its delivery fleet can now move just about anything from one part of the city to another. The service, called Swiggy Go, is currently limited to select cities. Zomato plans to replicate this, sources say. Neither of these developments have been previously reported.

Additionally, cloud kitchens are current area of focus for Swiggy. This week, the company announced it has established more than 1,000 cloud kitchens in the country, more so than any of its rivals.

Illg said cloud kitchens are crucial for a country like India, which has a low density of restaurants. “We have the visibility of all the market dynamics,” he said. “We can look at a location, comb through the data and know what kind of restaurants and food supplies would work there.”