Elasticrun Raises $75M to Empower Indian Neighborhood Stores

ElasticRun Secures $75 Million to Expand Commerce Platform for Local Stores

A company focused on empowering over 125,000 local retailers across India with working capital, brand-name inventory, and connections to e-commerce platforms announced a new funding round on Thursday. This investment will fuel its expansion within the world’s second-largest internet market.

ElasticRun, headquartered in Pune, has raised $75 million in its Series D funding. The round was co-led by current investors, Avataar Ventures and Prosus Ventures. Kalaari Capital, also an existing investor, participated in this financing, bringing the startup’s total funding to $130.5 million over four years.

The Rise of the Neighborhood Store

India’s vast network of small, independent stores – found in cities, towns, and villages – represents a significant opportunity. These stores have historically proven resilient against competition from large e-commerce companies and major retail chains.

Numerous e-commerce businesses, traditional retail chains, and fintech startups are now actively seeking partnerships with these “mom and pop” stores. They aim to capitalize on a substantial, largely untapped market.

ElasticRun assists store owners who often dedicate several days each month to traveling to larger cities to procure inventory. The platform provides direct access to goods from major brands, ensuring both reliability and affordability. This benefits brands by significantly broadening their market reach.

Store owners frequently experience downtime during slower business periods. ElasticRun addresses this by collaborating with leading e-commerce companies like Amazon and Flipkart. This allows them to leverage the store’s workforce for customer deliveries.

A Unique Delivery Model

Ashutosh Sharma, Head of Investments for India at Prosus Ventures, explained to TechCrunch that ElasticRun has developed a flexible, crowdsourced delivery system. This differentiates it from competitors who rely on a fixed payroll of delivery personnel.

He further stated that as ElasticRun has established its operational infrastructure, numerous new possibilities have emerged. One key area is providing working capital to these local stores.

Typically, store operators lack substantial savings and must sell existing inventory to fund restocking. ElasticRun has formed partnerships with banks and NBFCs to offer credit facilities to these merchants.

Expansion Plans and Future Growth

Currently, ElasticRun operates in over 300 cities across nearly all Indian states. The company collaborates with more than 125,000 neighborhood stores and intends to expand its reach to 1 million stores within the next 18 to 24 months, according to Shitiz Bansal, co-founder and CTO of ElasticRun.

The startup’s current annual revenue is approximately $350 million, with plans to exceed $1 billion within the next 12 months.

Saurabh Nigam, co-founder and COO, noted that the new funding round will also allow the company to provide early employees with “tangible benefits” reflecting the firm’s growth over the past five years.