Other investors in the $210 million seed round, first announced on January 28, include Tiger Global, Dragoneer Investments Group, Kora Capital, Unilever Ventures, Alpha Wave Global. DealShare is now valued at over $1.7 billion.
Founded in 2018 by Rajat Shikhar, Sankar Bora, Sourjyendu Medda and Vineet Rao, DealShare sells basic necessities and targets the middle-income population through a community group buying model.
It will use funds to strengthen technology, product innovations and employment.
“We will use our E-series funds to strengthen our customer base and technology capabilities. We aim to democratize online shopping for Bharat users with unparalleled service and experience by developing innovative products and technology solutions. This will supported by building our teams across the country and hiring new technology talent at all levels,” Rao said in a prepared statement.
The e-commerce company leverages the consumer-driven social commerce virality model for demand aggregation. This is different from the reseller-led Meesho model, which mainly operates in the apparel category, pioneering in the country. Meesho is now increasingly looking to go directly to consumers, much like Amazon and Flipkart.
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“I think we had a very different social commerce thesis,” Medda told ET. “We have always believed that social commerce would only work if it was deployed in the grocery space. For social commerce to work, we need virality among mass consumers. That will only happen when the agreements will be relevant for the whole population.
“The choices in electronics and fashion are vast to create virality,” he said. “While everyone (the other social commerce players) is going into direct commerce, we are the only big social commerce player in the country.”
Medda says that through the community-driven virality model, the company was able to keep the cost of fulfillment — warehousing and last mile — down to 5-6% of the order cost, compared to 20% or more for traditional e-commerce. He also said the cost of acquiring customers is $1 compared to the industry average cost of $10.
“These big differentiators that we will continue to hold onto,” Medda said. “We are perhaps the fastest growing e-commerce company. We are already close to a $1 billion revenue rate now. At the same time, we are burning very little. We are very close to operational profitability.
The startup has raised $393 million so far, including the latest round to compete in a critical high-traffic grocery market in non-metro cities. Avendus Capital was Dealshare’s exclusive financial advisor on the transaction.