FLair Explorer: E-commerce Inside the Startup Ecosystem in India

Photo by Pau Casals on Unsplash

The growth of the e-commerce industry in the last years is an effect of technology scalation, access to electronic devices, and internet connectivity. Further, struggling situations as the pandemic have accelerated the inclusion of more entrepreneurs in this area. The case of India is not far from the trend. Hundreds of Startups in this emerging market are attracting the attention of global VC. The B2C blossom in the last five years has influenced the expansion of the industry. Thereby, by the next ten years, it is expected that India surpasses the US industry and becomes the second largest e-commerce market in the world.

Traditional businesses are now part of a new era of digitalization and with this, new players are supporting this inclusion. A great variety of solutions in the retail sector emerge from startups that drive ecosystem innovation. Services in the area of finance, manufacturing, and logistics are improving the performance of the market. Moreover, when we talk about developing countries leading the change of the landscape, the implementation of new technologies is more specific to solve social needs and keeps the integration of 2nd and 3rd tier cities, similar to China’s evolution of e-commerce.

There is a strong participation of large players in the market like Amazon, Snapdeal and Flipkart. The consolidation of the market has opened the space to newcomers and the attraction of e-commerce startups. The behavior is also motivated by Government initiatives, the rise of internet penetration, the massive widespread of smartphones across all regions, the shift from cash to mobile payments, and the improvement of last-mile delivery.

Some of the key players and startups that are transforming the ecosystem are:

CoutLoot: CoutLoot is India’s largest offline to online (O2O) social commerce platform which lets anyone sell online across the country directly to buyers who can simply bargain and shop online from the sellers.

• Funding Rounds: Coutloot has raised a total of $4.1M in funding over 12 rounds. Their latest funding was raised on Dec 15, 2020, from a Seed round. It is funded by 12 investors. 9Unicorns Accelerator Fund and Venture Catalysts are the most recent investors.
• Type: Seed

Styledotme: StyleDotMe is creating new-age shopping experiences. It has built the world’s first real-time Augmented Reality (AR) tech platform called mirrAR that allows shoppers virtually to try-on jewelry without actually wearing it before making a purchase.

• Funding Rounds: Styledotme has raised a total of ₹35M in funding over 3 rounds. Their latest funding was raised on Jul 20, 2020, from a Seed round. Styledotme is funded by 12 investors. Survam Partners and Indian Angel Network are the most recent investors.
• Type: Seed

Green Agrevolution- Dehhat: Green Agrevolution is a rapid-growing Agro Supply Chain Company, working with thousands of farmers with its unique delivery model DeHaat. DeHaat is a technology-led platform to offer end to end agriculture services to Indian farmers with an aim to improve the efficiencies of the agriculture value chain.

• Funding Round: Green Agrevolution has raised a total of $19.3M in funding over 4 rounds. Their latest funding was raised on Apr 6, 2020, from a Series A round. Green Agrevolution is funded by 6 investors, AgFunder and Omnivore are the most recent investors
• Type: Series A

Wakefitkart: Wakefitkart is a sleep and home solutions company that manufactures quality mattresses and is sold directly through its eCommerce platform that enables customers to have a comfortable sleeping mattress at an affordable price.

• Funding Round: Wakefit has raised a total of ₹2.5B in funding over 2 rounds. Their latest funding was raised on Dec 15, 2020, from a Series B round. Wakefit is funded by 3 investors. Sequoia Capital India and Verlinvest are the most recent investors.
• Type: Series B

Udaan: Co-founded by 3 formes Flipkart executives. The platform solves the problem to connect small retailers with wholesalers and traders Udaan is a B2B trade platform that brings manufacturers, traders, retailers, and wholesalers into a single platform. The platform is about making business easy in India with a convenient and efficient B2B model.

• Funding Rounds: Udaan has raised a total of $1.2B in funding over 6 rounds. Their latest funding was raised on Jan 6, 2021, from a Series D round. Udaan is funded by 13 investors. Octahedron Capital and Moonstone Capital are the most recent investors.
• Type: Series D- Unicorn

Oyo Rooms: Founded in India in 2013, OYO is spread across 800 cities in 80 countries. OYO’s hotels offer rooms at prices under a reasonable budget segment, along with services like free breakfast facility, holiday packages, refer and earn, among others, enabling customers to access seamless amenities and experiences.

• Funding Rounds: OYO has raised a total of $3.2B in funding over 17 rounds. Their latest funding was raised on Jan 6, 2021, from a Series F round. OYO is funded by 23 investors. Hindustan Media Venture and Ritesh Agarwal are the most recent investors.
• Type: Series F- Unicorn

Lenskart: Lenskart is India’s fastest growing optical business. Lenskart was founded in 2010 with a vision to tobe the Numero Uno eyewear provider in India. With technology integration into the eyewear vertical, and keeping a deep focus on consumer happiness, Lenskart has grown more than 200% Year on Year in the last 2 years to be among the top 3 Optical Retail businesses of India today.

• Funding Rounds: Lenskart has raised a total of $459.6M in funding over 9 rounds. Their latest funding was raised on Dec 20, 2019, from a Series G round. Lenskart is funded by 12 investors. SoftBank Vision Fund and Kedaara Capital are the most recent investors
• Type: Series G- Unicorn

Craftsvilla: Founded in 2011, Mumbai-based Craftsvilla is India’s largest online marketplace for ethnic products. The company’s vision is to take societies back to their roots and help them discover their ethnic legacy. With over 20,000 sellers from across India, Craftsvilla has close to 3 million products online across categories including, clothing, handicrafts, jewelry and art among others.

• Funding Rounds: Craftsvilla has raised a total of $62.7M in funding over 9 rounds. Their latest funding was raised on Mar 20, 2020. The startup is funded by 5 investors. Supera is the most recent investor.

Meanbuy: Hyderabad, India’s first flexible e-commerce platform where the consumer decides the price and future shipping date is fixed to that. This platform represents the future of online shopping. It practices flexible pricing and flexible delivery dates. They let customers Pay What They Want to Pay on a variety of retail products.

Currently, the country holds a series of programs that support the flourishment of new players. For instance, the Government launched an e-market platform to organize small farmers and connect them with consumers. Some of the initiatives that startups in India can take advantage of are:

• Start-up India: The program seeks to build a world-class ecosystem providing funding, tax exemptions and advisory to enter and exit the market. Some of the projects include “Fund of Fund” and “Startup India Hub”. Startups can connect with stakeholders in the Indian ecosystem across all sectors and stages, get in touch with investors, have the chance to get mentorship, join incubators, explore a wide range of accelerators, and access valuable tools.
• Digital India: This is a flagship government program that looks to transform traditional industries in India into an interconnected economy. The program promotes diverse organizations to improve infrastructure, services, and empowerment of communities
• Skill India: With this project, entrepreneurs are encouraged to strengthen their skills. Moreover, the initiative provides support to small businesses to get funding, training, and support services.

The prominence of e-commerce in China has been greater than in India. But at the same time, the Chinese experience has motivated the foundation of some startups in this country. The two markets are quite similar in some aspects like the number of consumers, they are considered emerging countries and today, they are leading the technological transformation and becoming centers of innovation of high- tech products and services. Specifically, India has developed a competitive advantage in the market of software. If we follow the trend that drove the development of e-commerce in China, we will see in the short-run:

• The improvement and entrance of new actors that cover social commerce
• e-pharmacy
• O2O channels
• A rise of players in 3 and 4 tier cities
• The use of live streaming in the new retail.

There is still a large space to enter into this market and to spur innovation. The boom in the IT industry and entrepreneurial energy create the perfect conditions to diversify the startup ecosystem. Also, B2B and B2C startups are gaining traction and the economy is open to investors. Hence, the initiatives, the business environment and the opening up of the market are advantages that allow the convergence of Asian and western investments. It gives the possibility to the ecosystem to make outstanding progress in the future.

If you want to have a deep exploration of the new trends in the e-commerce startup ecosystem in India reach out to Founders Lair.

Note: Information about funding raising has been obtained from crunchbase.com