Indian online food and grocery marketplace startup Jumbotail announced on Thursday that it has raised $8.5 million (₹550 million) in Series-A funds from Kalaari Capital and current investor Nexus Venture Partners.
This is Kalaari Capital’s first time to invest in the business while Nexus previously invested $2 million in the company.
The Bangalore-based company said that the funds will be used to build its technology infrastructure and step up operational capacities so as to provide excellent customer experience in the wholesale food and grocery industry.
The online platform can be accessed by sellers where they can sell their products through a mobile app for ease of use so they do not have to invest in costly physical distribution networks.
It also offers services such as storefront delivery and payments collection for sellers and working capital credit from third-party credit providers to its customers through transactional data and proprietary algorithms.
According to Kalaari Capital partner Bala Srinivasa, about 98 percent of India’s food and grocery consumption is by small neighborhood retail stores or Kirana stores as they call it.
Jumbotail is providing the Kirana networks to financial industries seeking for an extension to their credit in an efficient and scalable manner.
With Jumbotail’s help, its tech-centric innovation opens up a way to deal with significant shortages concerning product discovery, delivery costs, stock outs and pricing.
Srinivasa also said that they are looking forward to see the online marketplace’s ability to reduce information irregularity, aggregate past unavailable demand and supply data and considerably improve economic outlooks for manufacturers, brands, financial firms and Kirana owners.
Jumbotail’s co-founder and chief executive Karthik Venkateswaran stated that while it is a multibillion dollar market prospect, they will still have to work out challenging problems that are so unusual to India that even copycats are unable to solve.
He added that customers come first in their business; they are also developing technologies and supply chains suitable for the next billion Indians in distributed, chaotic and formless location.
Nexus’ director Sameer Brij Verma said that they are pleased to have joined the Jumbotail team ever since it started. The company will be in need of a very strong first-principles method to solve challenges across commerce, competent fulfillment, bills and credit through their platform.
Verma also thinks that Bangalore-based group and their tech platform has a chance at solving the challenges mentioned above in order to establish value for the Kirana and Hotel, Restaurant & Café (HoReCa) sector over the next few years.
Jumbotail serves various wholesale customers in the Kirana and HoReCa businesses in Bangalore in order to build cost-effective supply chain for ordering staples, spices, dry fruits, packaged foods and fast-moving consumer goods (FMCG). It is also planning to expand little by little across the country.
The online grocery market is estimated to reach $40 million (₹2.6 billion) by fiscal year 2019 adding 62 percent compound annual growth rate (CAGR) by 2022 while India Brand Equity Foundation (IBEF) recently reported that the country’s food retail market is expected to generate $915 billion (₹59 trillion) by 2020.