In a remarkable development for the Indian startup ecosystem, a New Delhi-based company has successfully raised $13 million in a recent funding round, which it refers to as a “growth” round. This funding has propelled its valuation to an impressive $450 million before any new investments.
Funding Details and Valuation Growth
The latest funding round, spearheaded by RTP Global, is notably smaller than the previous Series B round of $35 million announced in May 2022, representing a 63% decrease. However, this new investment has increased the startup’s valuation by 43% compared to its last pre-money valuation of $315 million. With this round, the total funds raised since its inception in 2020 have reached $68 million, thanks to contributions from existing investors such as Z47, Peak XV Partners, and Think Investments.
Why Investors Are Interested
The startup has garnered significant attention from investors due to its comprehensive suite of e-commerce solutions that empower businesses of all sizes to establish an online presence and tap into the direct-to-consumer (D2C) market.
The D2C sector is poised for substantial growth as more brands aim to connect with younger consumers and as internet access expands to new households. In India, which ranks as the second-largest internet market globally, the D2C market is projected to soar to $60 billion by 2027, a significant increase from $12 billion in 2022, according to a report by KPMG.
Expanding Merchant Base
Currently, the startup boasts over 12,000 paying merchants, a significant rise from just 2,500 to 3,000 a year ago. These merchants span across India, Europe, the U.K., and the U.S., utilizing the company’s SaaS products to create online stores powered by platforms like Shopify, Magento, Salesforce, and WooCommerce. The solutions also facilitate online payments, checkout processes, and options for returns and cash-on-delivery. Additionally, the startup enables brands to conduct commerce through WhatsApp, a widely used platform in markets such as India, parts of Europe, and Brazil.
Among its clientele are notable brands, including a leading eyewear company, a personal care brand, a cosmetics firm, and various international fashion labels.
Unique Product Offerings
While some of the products offered by the startup are available through other providers, its integrated suite encourages customers to adopt multiple solutions. For instance, using the login product enhances retargeting efforts, leading to increased utilization of their WhatsApp commerce solution. This interconnectedness has contributed to a 20% year-over-year growth in annualized revenue, reaching over $30 million this year, up from $25 million last year. The startup has facilitated a cumulative gross merchandise value of $2 billion, with a balanced split between prepaid and cash-on-delivery transactions.
Future Plans and Market Expansion
With the new funding, the startup aims to broaden its market presence and customer base by exploring new territories and strengthening its foothold in regions where WhatsApp is widely used, such as Germany, France, and various Latin American countries, including Brazil. The company also plans to enhance its AI capabilities within its products, already offering solutions like AI-driven calls for abandoned carts. Furthermore, it intends to enable Indian merchants to reach international customers through a global checkout solution that integrates with various international payment processors.
Currently, the startup has a financial runway of 60 to 70 months, with approximately $35 million to $37 million in reserves, and is targeting profitability within the next 18 months. Plans for a public offering are also on the horizon within the next 3 to 5 years. Despite attracting investor interest, the co-founder has confirmed that the company is not actively seeking additional funding at this time.
The startup employs around 400 individuals, primarily based in its offices in Gurugram and Bengaluru, with a small number of employees located in the U.K.