With most small grocery stores in India yet to get online, startups racing to digitize them continue to see promising backing from investors. Jumbotail, an online wholesale marketplace for grocery and food items, today said it has raised $12.7 million to scale its operations.
The Series B financing round for the Bangalore-based startup was led by Heron Rock, with participation from Capria Fund, BNK Ventures and William Jarvis and existing investors Nexus Venture Partners, and Kalaari Capital. The three-and-a-half-year old startup has raised about $24 million to date.
More than 10 million grocery stores, locally known as kiranas, bridge urban cities, towns and villages in India. They control over 95% of the $350 billion food and grocery market in the nation, according to some estimates.
Jumbotail operates a marketplace that connects tens of thousands of these kirana stores with brands and traders. It offers a whole suite of services including supply chain logistics, a mobile app for placing orders, integration with point-and-sales devices, and credit solutions to shop owners that can’t easily get loan from banks.
Ashish Jhina, cofounder and COO of Jumbotail, told TechCrunch in an interview that the startup will invest the fresh capital in developing AI solutions to improve its supply chain network, and make it easier for brands to get started on the marketplace.
Jumbotail, which is only operational in Bangalore area for now, offers its mobile app and support in four languages (English, Hindi, Malayalam, and Kannada), something that is crucially important for their business.
“Our fundamental principle is to serve our customers in languages they are comfortable in. Many of these people are not using other apps. They are using smartphones for the first time. This is also their first experience with e-commerce,” he said.
Jhina added that even as Bangalore area is the only place the startup operates in, Jumbotail is on track to clock $100 million in GMV there by year-end. The startup is exploring expansion in other cities and will make moves in that space soon enough, he said, without disclosing the geography.
The startup employs about 140 people and has an additional 400 staff that work in supply chain network. It’s a small team compared to the likes of Amazon India and Walmart-owned Flipkart that are increasingly working with small retailers in the country to grow their wholesale operations. And then there is Reliance Retail, which is expanding its footprint quickly, too.
But Jhina, an alumnus of Stanford, don’t necessarily seem them as a big threat. On the contrary, he believes that since much of the market remains untapped, any player with deep pockets is helping educate the masses about the potential of e-commerce in the nation. In some ways, Jumbotail also competes with the likes of BigBasket, Grofers, Udaan, and ShopX, all of which are comparatively heavily backed.