Dealshare Raises $21M to Expand E-commerce in India

DealShare, an Indian startup focused on providing an e-commerce experience for consumers with modest incomes, announced on Tuesday that it has secured $21 million in a recent funding round as it aims to broaden its reach within the world’s second-largest internet market.

The Series C funding round was spearheaded by WestBridge Capital, a venture capital firm. Alpha Wave Incubation, managed by Falcon Edge Capital, Z3Partners, and current investors Matrix Partners India and Omidyar Network India also contributed to the round, increasing DealShare’s total funding to $34 million.

DealShare’s inception coincided with Walmart’s acquisition of Flipkart, as noted by the startup’s founder and CEO, Vineet Rao, during a recent online event. Rao explained that while Amazon and Flipkart had successfully established a presence in urban areas of India, a significant portion of the country remained underserved. He identified an opening for a new entrant in the market.

Initially, the company operated as an e-commerce platform through WhatsApp, offering a wide range of products to customers. It quickly became apparent that consumers were primarily interested in purchasing products offered at reduced prices, according to Rao.

This observation has since become central to DealShare’s business model. The company now encourages customers to share product deals with their network of friends in exchange for discounts and cashback rewards. Having since developed its own application and website, DealShare currently operates in more than twenty cities across India.

Rao stated that customers prioritize products that meet their specific needs and offer the best possible value for their money. “We concentrated on items produced locally rather than national brands. Currently, 80% to 90% of our sales consist of locally sourced products,” he explained.

“We dedicated ourselves to establishing a network of these suppliers. This proved challenging, as many were hesitant to participate in modern retail channels like e-commerce. Some had previous negative experiences collaborating with e-commerce companies,” he added.

Sandeep Singhal, co-founder and managing director of WestBridge, stated, “A large percentage of the Indian population lives in non-metropolitan areas, presenting a substantial business opportunity. The purchasing habits of lower and middle-income groups differ, particularly in smaller markets, and DealShare appears to have a strong understanding of these differences. We are impressed with the team’s growth over the past two years, while maintaining a commitment to a cost-effective, impactful approach.”

The startup reports that it has spent the last year and a half enhancing its financial performance and is approaching profitability. Its current plans involve investing in its technology infrastructure and expanding its platform to encompass 100 cities and towns across five Indian states within the next year. While the company did not reveal its current customer base, it aims to reach 10 million customers and achieve an annual Gross Merchandise Volume (GMV) of $339 million.