Arzooo raises $70 million to bring ‘best of e-commerce’ to brick-and-mortar stores in India –


Arzooo, an Indian startup trying to bring the “best of e-commerce” to brick and mortar stores, has raised $70 million in a new round of funding as it looks to expand its retail platform in the South Asian market.

SBI Investment and Trifecta Leaders Fund led the Series B financing of the Bengaluru-headquartered startup. Tony Xu, founder of DoorDash, Celesta Capital and 3 Lines VC, also invested in the new round, which values ​​it at $310 million. The startup has raised more than $85 million in several rounds to date.

Millions of stores in India struggle to compete with major retail chains and e-commerce giants Amazon and Flipkart because they don’t offer a wide selection of items and they can’t offer customers the best prices.

Founded by two Flipkart alums, Arsoooo tries to solve this by partnering with major brands to secure large stocks and sell and deliver them to stores at better prices.

The startup, which currently operates in the consumer durables and electronics category and offers retail stores access to more than 10,000 different products, says it is partnering with more than 30,000 stores in 22 Indian states.

“The consumers who are walking in and out of these stores because of the pricing, we can help address this,” Khushnud Khan, co-founder and CEO of Arzooo, said in an interview.

Flipkart alums Rishi Rathore (left) and Khushnud Khan co-founded Arzooo in mid-2018. Image Credits: Arsoooo

Arzooo has built its own logistics supply chain network for last-mile delivery of supplies and also provides businesses with working capital, giving them up to $25,300 in revolving credit.

“These are the stores that fall in the bottom layer of the value chain. They don’t have such a good margin chain as, for example, Reliance Retail and Croma and Amazon. They are sandwiched between the two,” he explained.

Arzooo can provide these stores with better prices because it takes several middlemen out of the equation. “We work with most major manufacturers and national distributors today,” he said.

These stores, which typically range in size from 700 to 1,200 square feet, clock in between $12,500 and $19,000 in sales each month. They provide 75% of all consumer durables in India, Khan said.

“Arzooo’s business model is highly capital efficient and able to meet the increasingly diversified needs of both stores and end customers. It’s also great that they’ve built a functional, proprietary logistics system, which is one of the most important parts of the business. There is no limit to the company’s future and we are committed to fully supporting the company on their path to great success,” Yoshitaka Kitao, chairman and president of SBI Investment, said in a statement.

Arzooo plans to use the new capital to expand to more Indian states and also launch consumer-facing services, Khan said.


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