While India’s urban population is shifting from mom-and-pop stores to instant commerce platforms, its rural sector – home to more than 800 million people – still relies heavily on offline businesses for daily consumption. does Velocity It aims to transform this untapped market so that people living outside the country’s top 200 cities can easily shop online.
Founded in September 2021, the Chennai-headquartered startup has moved from earlier B2B supply chain businesses to instant commerce platforms to address e-commerce access for people living in semi-urban areas. Participated in farm construction. and rural areas, commonly referred to as “India”.
For a long time, Flipkart owned by e-commerce giants Amazon and Walmart Tried to tap rural India. To gain more depth in the world’s second largest Internet market after China. The region has also attracted startups including Meshu. daily. However, Wheelocity founder and CEO Selvam VMS told TechCrunch that none of them can crack the space due to accessibility issues.
“Our approach to solving this problem is very unique,” he said in an interview. “We’re focused on creating a 100x better alternative for our customers.”
Wheelocity has initiated the change by providing fresh produce including vegetables and fruits and groceries through its app. However, unlike traditional e-commerce platforms that sell products online, the startup has taken a “fidgety” approach. It includes electric three-wheelers to physically transport its products to villages on a daily basis to help the startup gain consumer trust. These vehicles allow customers to place orders using Wheelocity’s app and receive delivery at their doorstep.
VMS predicts that once they get used to it, users will start using the Wheelocity app at home.
Unlike Velocity, which offers daily doorstep delivery, other e-commerce platforms use up to a week to get products delivered in the same region, the executive added. This makes delivering fresh consumables and groceries a challenge.
Wheelocity leverages its existing supply chain, built for the former B2B business, to quickly deliver fresh produce and groceries to customers. After their purchase from third parties, including farmers, the products reach consumers with Wheelocity’s branding.
VMS sees this shift, which began quietly in October 2023, as a $1 trillion-plus opportunity. He did not disclose business figures but said the startup has “very, very good retention.”
The startup currently offers its e-commerce platform in 3,500 villages in central Tamil Nadu and has 1,000 electric vehicles to allow physical ordering and delivery. It has already set up an operations office in Trichy, a tier-II city in Tamil Nadu, to better understand the buying and selling behavior of consumers and get their feedback. After that, it plans to expand the business to 20,000 towns and villages and expand it to all five southern states of India within the next 12 months, taking its platform to 10 million users.
Lightspeed, an existing investor in Wheelocity, has backed the latest move by leading its Series A2 round of $15 million. In July 2022, the VC fund led the startup’s $12 million Series A round.
Alteria Capital, Anicut Capital, and VMS also participated in Wheelocity’s latest round. Further, the round includes an undisclosed amount of debt, primarily to finance its electric fleet.
Lightspeed partner Rahul Taneja told TechCrunch that the VC fund decided to reinvest in Wheelocity because the market size was significantly large and untapped and the startup built a unique business model, “which is in these areas.” Allows for profitable coverage that was not historically possible.”
Taneja said the founder’s quality and passion for building a “profitable business” also helped convince Lightspeed to close the deal.
Focusing towards small towns and villages in India has been an emerging trend in the VC market, as consumers in these areas often have disposable income and purchasing intent. Earlier this year, Accel also began eyeing the region for future unicorn hunting.
Credit : techcrunch.com
