Jumbotail is an online wholesale marketplace that sells groceries and food products, announced that it had raised an the additional $14.2 million , as Bangalore’s startup pursues the chance to digitally transform neighborhood shops in the second largest online market.
The five-year-old company said that the latest tranche of the Series B funding round was managed by VII Ventures, with participation from Nutresa, Veronorte, Jumbofund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners and Discovery Ventures.
The startup informed TechCrunch that the new round completes its Series B round that it began in the year 2019 with a round that was $12.7 million. It was able to raise $44 million from this round (including Friday’s tranche) and, to date, has raised around $54 million in equity investments as of the time it spoke to the publication.
Jumbotail claimed it services more than 30,000 local stores (popularly called in India as Kiranas) in India. In addition to its business-to business marketplace, the startup offers working capital to local stores by partnering that it has with banks.
The startup, which developed their own supply chain network that allows last-mile delivery, also provides these stores with point of sale devices to give them access to a larger assortment of catalogs, and get the latest inventory delivered to them in just two days. The company also integrates the retailers with other hyperlocal delivery companies like Dunzo or Swiggy to assist mom and pop shops expand their customers.
Ashish Jhina who is the co-founder of Jumbotail He believes that the startup is at an at a crossroads in its growth and is prepared for the next phase of its journey that will include recruiting top talent as well as expanding to new areas in India including several locations within South India.
“We have seen a lot of interest from investors around the globe , who are attracted to our highly scalable and profitable business model, based upon the most advanced technology in the market and our customers’ NPS,” said Jhina.
At a recent gathering, Jhina said that the coronavirus outbreak, which caused New Delhi to order a nationwide lockdown and restrict e-commerce companies and has shown how important local stores are to people’s lives. In spite of the negative effects caused by the virus however, it has helped speed up the use of technology in the stores.
Many food companies which local shops sell aren’t standardised, which raises the question of their quality. To address this issue, Jumbotail runs its own private label collection and Jhina confirmed that the company would use a portion of the fresh funds to expand the catalog. The private label permits Jumbotail to ensure that its partners are able to access the stock of products throughout the yearand, of course it will help the company which is profitable in operation for more than three quarters and is now able to increase its margins.
There are over 30 million local stores in India situated across the hundreds of towns and cities across the nation. These local stores have been operating for many years and have survived -and even prosperedin spite of the e-commerce giants pumping billions of dollars into India to transform the way customers shop. In recent times many startupsas well as giants in India have started to look at ways to collaborate with the local shops.
The other is the country’s top retailer Reliance Retail, which serves more than 3.5 million customers a week via 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 made its debut in the e-commerce market by launching JioMart through a joint venture with its sister company the telecom big Jio Platforms. In the middle of last year, JioMart had expanded to more than 200 Indian towns and cities but its presence in these cities and customer support leave many things to be desired.
Reliance Retail also maintains a relationship with Facebook to enable WhatsApp integration. Facebook is the one that has invested $5.7 billion into Jio Platforms last year It has also stated it is exploring ways to collaborate with Reliance to digitalize the nation’s most beloved mom and pop shops and other medium and small-sized businesses.
In order to create JioMart, Reliance Retail is working with local shops by providing them with a point-of-sale system to allow them to take payments electronically. Additionally, it allows these stores to purchase their stock through Reliance Retail, and then utilize their physical stores for delivery sites. In the moment, the service is focused primarily on the delivery of groceries. In a recent presentation to customers, Goldman Sachs analysts estimated that Reliance could be the biggest player in grocery delivery within the next three years.
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