Jumbotail, the online wholesale marketplace for groceries and food products, announced that it had raised an additional $14.2 millions as its Bangalore startup pursues the chance to digitally transform neighbourhood retail stores in the second largest market for internet-based products.
The five-year-old startup announced that the latest tranche of the Series B round of financing was helmed by VII Ventures and included Nutresa, Veronorte, Jumbafund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners, and Discovery Ventures.
The startup informed TechCrunch that the new round closes the Series B round that it started in 2019 with a round that was $12.7 million. It was able to raise $44 million from its Series B round (including Friday’s tranche) up to the point that it has raised around $54 million of equity investment as of the time it spoke to TechCrunch.
Jumbotail claimed it services more than 30,000 stores in the neighbourhood (popularly called in India as Kiranas) across the nation. In addition to its business-to-business marketplace, the company also offers working capital to local stores by partnering in conjunction with finance institutions.
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The company, which has developed an own supply chain system to allow last-mile delivery, additionally supplies these stores with point of sale devices that allow them to have access to a larger assortment of catalogues, and get the latest inventory delivered within two days. It also connects the retailers with other hyperlocal delivery companies like Dunzo or Swiggy to help small and family-owned businesses to expand their customers.
Ashish Jhina who is the co-founder of Jumbotail and Jumbotail, believes that the company is at an at a crossroads in its growth, and is prepared for the next phase of its journey that includes recruiting top talent and expanding to other regions across the country particularly in locations within South India.
“We have seen a lot of demand from investors all over the world who are attracted to our highly scalable and profitable business model based on industry-leading technology and our customers’ NPS,” said Jhina.
In a recent virtual gathering, Jhina said that the coronavirus outbreak, which caused New Delhi to order a nationwide lockdown and restrict e-commerce businesses, has demonstrated how important local stores are in the lives of people. For all the harm caused by the virus however, it was able to help in the rapid use of technology in the stores.
Many food companies that local stores sell aren’t standardised, which raises the question of their quality. To bridge this gap, Jumbotail runs its own private label collection and Jhina stated that the company will use a portion of the fresh fund to expand this portfolio. The private label lets Jumbotail make sure that its retailers have access to items all year round -and, of course it will help the business that has been operating profitably for the past three quarters, and has improved its margins.
There are over 30 million local stores in India situated across the thousands of towns and cities across the nation. These local stores have been operating for a long time and have survived and even thrive even with online giants investing billions of dollars into India to transform the way customers shop. In recent times numerous startups – -as well as giants in India have started to investigate ways of working with the local shops.
The other is the country’s biggest retailer Reliance Retail, which serves more than 3.5 million customers every week with its more than 10,000 stores that are located across more than 6500 towns and cities across the country. In the latter half of the year, it began to enter the online market through a joint venture with its sister company the telecom giant Jio Platforms. At the end of 2018, JioMart had expanded to more than 200 Indian towns and cities however, its coverage within these cities and its customer service leaves many things to be desired.
Reliance Retail also maintains a collaboration with Facebook to enable WhatsApp integration. Facebook has invested $5.7 billion into Jio Platforms last year It has also stated it is exploring ways to partner with Reliance to make it easier for the nation’s mom-and-pop stores, and other medium and small-sized businesses.
In order to create JioMart, Reliance Retail is working with local stores by providing them with a point-of-sale system to allow the shops to accept electronic payments. Additionally, it allows the shops to purchase their stock through Reliance Retail, and then make use of their physical locations to serve as delivery locations. At the moment, the platform is mostly focused on delivery of groceries. In a recent presentation to customers, Goldman Sachs analysts estimated that Reliance could be the biggest retailer on the internet within the next three years.