E-commerce firm DealShare’s valuation crosses $455 mn after raising $144 mn

DealShare, a startup that has built an e-commerce platform for middle and lower-income groups of consumers in India, has raised $144 million in its latest funding round.

The round was led by Tiger Global and was co-led by WestBridge Capital, Alpha Wave Incubation (a venture fund backed by ADQ, and managed by Falcon Edge Capital) and Z3Partners. There was also participation from Partners of DST Global, Matrix Partners India, and Alteria Capital.

The firm is known for pioneering the community group buying (CGB) model in India. The funding has taken the valuation of the firm at $455 million.

This transaction marks the third funding for the company in a span of seven months, with the valuation increasing nine-fold on the back of high growth momentum. With the current round, the total funding raised by DealShare stands at $183 million.

“We believe India is a unique market with its highly diverse demographics and requires an indigenous model that is built based on first principles and differentiates itself from western and Chinese e-commerce models,” said Vineet Rao, CEO and founder, DealShare,

Sourjyendu Medda, founder, chief business officer and chief finance officer at DealShare said the funds will also be used to augment the firm’s current growth trajectory. In FY 20-21 fiscal, DealShare grew 5X to reach $200 million annual GMV (gross merchandise) run rate.

“In a short span of 2 years, we have serviced more than 3 million consumers and over 20 million orders,” said Medda. “We are confident of hitting a $1 billion GMV run rate by the end of the year thereby building a strong 10 million customer base.”

The firm currently serves 40 cities and towns across 5 states and will increase its footprint to 100 cities and towns and 10 states by year end.The company will also expand internationally, starting with the UAE and is establishing its first base in Abu Dhabi.

DealShare has pioneered this model with innovations in app experience and technology, direct from factory procurement, gamified and viral demand generation. It has built DealShare dost (community leader) network that enables DealShare to operate at the lowest cost operations in the world.

The firm would also be utilizing the funds primarily to invest in AI-driven innovations in its user experience leading to a highly personalised, fun-filled and gamified experience. The company’s monthly active users already use our app over 40 times a month making it the most engaging ecommerce app. It will continue to add more innovative capabilities and services to serve a wider range of user needs. The firm is planning to increase its footprint from 20 warehouses across 5 states to over 200 warehouses across 10 states by the end of this year.

“We will also invest in improving and scaling up our operations rapidly,” said Rao.

Griffin Schroeder, Partner at Tiger Global said DealShare’s unique approach combines discovery-led social sharing, group buying, and a gamified shopping experience with a simple consumer interface.

“They are well-positioned to power the next wave of Indian ecommerce growth”, said Schroeder.

Sandeep Singhal, co-founder, WestBridge Capital said DealShare has been able to achieve especially amongst first-time internet users in the hinterlands of the country.

DealShare currently has over 1000 micro-entrepreneurs partners promoting the community group buying (CGB) model in the country. It is generating a massive amount of employment opportunities across all tiers of cities and towns.

“We plan to strengthen our network further and increase it to over 5000 by this year-end,” said Sankar Bora, founder, chief operating officer, DealShare.

Navroz Udwadia, co-Founder and CEO, Falcon Edge Capital said DealShare demonstrates best-in-class unit economics and capital efficiency (5.0x). It is delivering a compelling value proposition to its customers, value-conscious middle Indians in Tier 2 and 3 cities who crave local and regional products.

He said DealShare is constantly iterating and improving its playbook of viral customer acquisition through group buying and gamification, while driving steady retention and cohort and unit economic improvements.

“Today, DealShare is a business that expects to break-even in the next 12 months,” said Udwadia.

Tarun Davda, managing director, Matrix India said this fundraise is a testament to DealShare’s exponential growth and capital-efficient business model. He said this uniquely serves the needs of Tier 2 and 3 consumers that are embracing online grocery shopping like never before.