India-based logistics startup ElasticRun has raised a Series C investment of $40 million in a round led by Prosus Ventures and saw the participation of existing investors Avataar Ventures and Kalaari Capital. ElasticRun has built a last-mile logistics platform for the Indian market that helps improve the uptime of logistics assets while creating greater visibility into goods available at traditional mom and pop stores.
The ecommerce industry in India has witnessed phenomenal gains in the last decade, thanks to the fertile competition between companies like Amazon, Flipkart and PayTM. However, the growth in ecommerce has yet not impacted the existence or the continued proliferation of mom and pop stores and box shops, which are ubiquitous across every urban and suburban space in India.
This seeming disconnect can be explained by the deep interpersonal connections that these shopkeepers develop with people in their vicinity, which is hard for a digital ecommerce marketplace to replace. That said, these stores usually stock goods that are cheap and meant for instant gratification – like fast-moving consumer goods (FMCG) that include anything from soap to a bag of chips.
On a regular day, all these shops go through brief lulls in sales, but limited stock volumes and logistics opacity meant they could do little to act on the dips in consumer traffic. ElasticRun comes into the picture by digitally connecting these convenience stores and relaying goods between them – based on demand and lull times, while effectively increasing sales volumes across the board.
ElasticRun currently has a presence across 200 Indian cities, connecting hundreds of thousands of convenience stores with each other, creating a network that is both fluid and extremely efficient. Such networks are also useful to the FMCG companies as visibility into the flow of their goods among convenience stories helps them gauge consumer tastes and interests. Unsurprisingly, nearly all major FMCG brands within India have partnered with ElasticRun.
“The last-mile problem is still a major issue both for logistics and consumer goods companies in India. By working with the network of small stores across the country, we solve that problem while helping the store owners grow their businesses,” said Sandeep Deshmukh, co-founder and CEO of ElasticRun. “In addition, offering a flexible logistics extension to consumer goods companies to directly reach these small retail shops is a huge advantage over traditional distribution networks.”
For FMCG brands, this is a market opportunity to expand their footprints, as connecting with small convenience stores has traditionally remained a laborious exercise that often involves sales agents negotiating product volumes with a store owner without having concrete data to back up weekly forecasts. But with the digitalization of convenience stores, it is much easier for every stakeholder within the supply chain to plan their operations accordingly.
“ElasticRun is one of those rare businesses that identified a massive need in the market, matched it with a local solution paired with technology, for the benefit of all parties involved,” said Ashutosh Sharma, the head of investments for India at Prosus Ventures. “Consumers get faster deliveries and a greater choice of goods; store owners realize increased revenues and touchpoints with their customers; and consumer goods companies get better access and insight into their target audiences.”