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HomeStart UpDealshare bags $45 million from ADIA, plans global expansion

Dealshare bags $45 million from ADIA, plans global expansion

DealShare, a social commerce grocery startup, announced that it had received a fresh infusion of $45 million from an Abu Dhabi Investment Authority (ADIA) wholly-owned subsidiary as part of a larger round. 

Tiger Global, Dragoneer Investments Group, Kora Capital, Unilever Ventures, and Alpha Wave Global are among the other investors in the $210 million round, first reported on January 28. DealShare is currently worth more than $1.7 billion. 

DealShare, founded in 2018 by Rajat Shikhar, Sankar Bora, Sourjyendu Medda, and Vineet Rao, provides daily necessities to the middle-income demographic through a community group buying strategy.

The funds will be used to improve technology, product innovation, and hiring.

“We will be utilizing the funds from our Series E round to strengthen our customer base and technology capabilities. We aim to democratize online shopping for Bharat users with unmatched service and experience by developing innovative products and tech solutions. This will be supported by building our teams across the country and hiring new tech talent at all levels.” said Rao in a prepared statement.

For demand aggregation, the ecommerce company uses the consumer-led virality paradigm of social commerce. This differs from the reseller-led approach pioneered in Meesho, which mostly operates in the clothes market. Meesho is now increasingly aiming to go direct to consumers, much like Amazon and Flipkart.

“I think we had a very different thesis to social commerce,” said Medda to ET. “We always believed social commerce will only work if it is deployed in the grocery space. For social commerce to work we need virality in the mass consumers. That will only happen when the deals are relevant to the larger population.”

“The choices in electronics and fashion are large for virality to be created,” he said. “While everyone (other social commerce players) is getting into direct commerce we are the only sizeable social commerce player in the country.”

Medda states that by employing the community-led virality model, the company has been able to keep fulfillment costs—warehousing and last-mile delivery—to 5-6% of the order cost, as opposed to 20% or more for traditional e-commerce. He also stated that acquiring a customer is $1, compared to the industry average of $10.

“These big differentiators we will continue to retain,” said Medda. “We are possibly the fastest growing ecommerce company. We are already close to a $1 billion revenue run rate now. At the same time, we burn very little. We are very close to operational profitability.”

The business has raised $393 million in total funding, including the most recent round, to compete in a crowded grocery essentials market in non-metro cities. Dealshare’s exclusive financial advisor on the deal was Avendus Capital.

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