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While India’s urban population is shifting from convenience stores to quick commerce platforms, the rural side – home to over 800 million people – still relies heavily on offline businesses for daily consumption. Wheel speed It aims to transform this untapped market to allow people living outside the top 200 cities in the country to shop online with ease.
The Chennai-headquartered startup, founded in September 2021, has pivoted from its earlier B2B supply chain business of express commerce platforms to building a platform to solve e-commerce access for people living in semi-urban areas. and rural areas, which are commonly referred to as “Bharat”.
For a long time, e-commerce giants Amazon and Walmart-owned Flipkart have been doing this I tried to take advantage of rural India To delve into the second largest Internet market in the world after China. The area has also attracted startups including Meesho and Rosanna. However, Wheelocity founder and CEO Selvam VMS told TechCrunch that none of them have been able to penetrate that space due to the access issue.
“Our approach to solving this problem is very unique,” he said in an interview. “We are focused on building an alternative that is 100 times better for our customers.”
Wheelocity started the transformation by providing newly produced goods including vegetables, fruits and groceries through its app. However, unlike traditional e-commerce platforms that sell products online, the startup took a “vegital” approach. This includes electric tricycles to allow the startup to transport its products to villages virtually daily to help gain the trust of consumers. These vehicles allow consumers to place orders using the Wheelocity app and get deliveries at their doorstep.
Once they get used to it, consumers will start using the Wheelocity app at home, VMS predicted.
The executive added that, unlike Wheelocity, which offers doorstep delivery daily, other e-commerce platforms use up to a week to deliver products in the same area. This makes it difficult to deliver fresh consumables and groceries.
Wheelocity uses its existing supply chain, built specifically for pre-B2B businesses, to get customers fresh goods and groceries faster. After being purchased from third parties including farmers, the products reach consumers with the Wheelocity brand.
VMS sees the transformation, which began silently in October 2023, as a trillion-dollar opportunity. He did not reveal numbers related to the business, but said the startup has a “very, very good retention rate.”
The startup currently offers its e-commerce platform in 3,500 villages in central Tamil Nadu and has 1,000 electric vehicles to allow for physical order placement and delivery. It has already set up an operations office in the tier-II city of Trichy in Tamil Nadu to better understand consumers’ purchasing behavior and get their feedback. Thereafter, it plans to expand its business to 20,000 towns and villages and expand its reach to all five southern states in India in the next 12 months, taking its platform to 10 million consumers.
Wheelocity’s existing investor, Lightspeed, backed the latest move by leading its $15 million Series A2 round. In July 2022, the venture capital fund led the startup’s $12 million seed round.
Alteria Capital, Anicut Capital, and VMS also participated in Wheelocity’s new round. Furthermore, the round includes an undisclosed amount of debt, primarily to finance its electric fleet.
Lightspeed partner Rahul Taneja told TechCrunch that the venture capital fund decided to reinvest in Wheelocity because the market size was so large and untapped, and the startup had created a unique business model that “allows for profitable coverage of areas that were not historically possible.”
The founder’s quality and passion for building a “profitable company” before pivoting also helped convince Lightspeed to close the deal, Taneja said.
Shifting focus to small towns and villages in India has been an emerging trend in the venture capital market, as consumers in those areas often have less disposable income and purchase intent. Earlier this year, Accel also began searching the area for future unicorns.
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