Jumbotail, a digital wholesale marketplace specializing in grocery and food products, announced on Friday a further investment of $14.2 million. This funding supports the Bangalore-based company’s efforts to modernize and connect local retail stores within the world’s second-largest internet market.

The five-year-old company stated that this latest funding round for its Series B was spearheaded by VII Ventures, with contributions from Nutresa, Veronorte, Jumbofund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners, and Discovery Ventures.

According to information shared with TechCrunch, this new investment completes the Series B funding, which initially began in 2019 with a $12.7 million tranche. The total raised in the Series B round reaches approximately $44 million, bringing the startup’s overall equity investment to around $54 million to date.

Jumbotail currently supports a network of over 30,000 neighborhood stores throughout India, commonly referred to as kiranas. Beyond its business-to-business marketplace, the company also facilitates access to working capital for these stores through collaborations with various financial institutions.

The company has developed its own dedicated supply chain network to ensure efficient last-mile delivery. It also equips these stores with point-of-sale systems, providing access to a broader product catalog and enabling inventory delivery within two days. Furthermore, Jumbotail integrates these stores with hyperlocal delivery services like Dunzo and Swiggy, helping them broaden their reach to more customers.

Ashish Jhina, co-founder of Jumbotail, expressed his confidence that the company has reached a pivotal moment in its development and is prepared for its next phase of growth. This includes attracting skilled professionals and expanding operations to additional regions, particularly within South India.

“We are experiencing significant investor interest globally, attracted by our highly scalable and profitable business model, which is underpinned by leading-edge technology and strong customer satisfaction,” noted Jhina.

During a recent online conference, Jhina highlighted how the coronavirus pandemic, and the resulting nationwide lockdown and restrictions on e-commerce, underscored the vital role of neighborhood stores in people’s daily lives. He also noted that the pandemic accelerated the adoption of technology within these stores.

Many food products sold in neighborhood stores lack standardization, raising concerns about their quality. To address this, Jumbotail maintains its own private label product line, and Jhina indicated that a portion of the new funding will be used to expand this offering. A private label also ensures a consistent supply of goods for retail partners throughout the year and contributes to the startup’s operational profitability, which has been sustained for nearly three quarters.

India is home to more than 30 million neighborhood stores spread across countless cities and towns. These businesses have demonstrated resilience, surviving and even prospering despite substantial investment by e-commerce companies aiming to transform shopping habits. In recent years, numerous startups and established companies in India have begun exploring partnerships with these local stores.

Reliance Retail, India’s largest retail chain, serves over 3.5 million customers weekly through its nearly 10,000 stores in over 6,500 cities and towns. In late 2019, it entered the e-commerce sector with JioMart, a joint venture with its sister company, telecom giant Jio Platforms. By mid-2020, JioMart had expanded to over 200 Indian cities and towns, although its reach and customer service within those areas still require improvement.

Reliance Retail also has a strategic partnership with Facebook for WhatsApp integration. Facebook invested $5.7 billion in Jio Platforms last year and has expressed its intention to collaborate with Reliance on digitizing India’s local stores and other small and medium-sized businesses.

For JioMart, Reliance Retail is equipping neighborhood stores with digital point-of-sale machines to facilitate electronic payments. It also enables these stores to source inventory from Reliance Retail and utilize their physical locations as delivery hubs. Currently, the platform primarily focuses on grocery delivery. A recent report by Goldman Sachs analysts suggests that Reliance has the potential to become the leading player in online grocery within three years.