Tiger Global leads $144 million funding round in DealShare

Representative image (Source: ShutterStock)

Social commerce startup DealShare said it has raised $144 million in its Series D round led by Tiger Global, in what is its third funding round in the last seven months, underscoring the high investor appetite in this space.

The round was co-led by WestBridge Capital, Alpha Wave Incubation, Z3Partners with participation

from DST Global, Matrix Partners India, and Alteria Capital. With this, DealShare has raised a total funding of $183 mn to date, pegging its valuation at $455 million, post-money.

DealShare, founded in September 2018 by Vineet Rao, Sourjyendu Medda, Sankar Bora and Rajat Shikhar, is focussed on bringing an online shopping experience to first-time internet users in India's hinterlands. The founders believe there is an opportunity to build a different kind of online commerce for the mass market population in Tier 2 and Tier 3 towns with a monthly household income of less than Rs 50,000.

It is estimated that 70-80 percent of the wallet spend in this target segment goes towards basic essentials, and the stock keeping units far lower than what one would see in the metros. It wants to do what discount retailer DMart did with physical retail, in terms of expanding the total addressable market beyond the top 5 percent of India's population, by bringing quality products at low prices.

The startup uses two ways to bring down the cost of essential products for the mass market segment- it directly sources household items of lesser known brands in smaller towns from the factories, thereby cutting down on distribution and channel sales. It uses platforms such as WhatsApp and Telegram to build on its customer base and gives group-buying discounts on these essentials. It also uses a network of influencers to make deals viral and offers consumers incentives to share product deals with their friends.

Its founder and CEO Vineet Rao said its direct from factory procurement, innovations in app experience and building a community leader network has helped it operate at a low cost.

"This has enabled DealShare to rapidly grow to $200M GMV ARR. We would be utilizing the funds primarily to invest in AI-driven innovations in our user experience leading to a highly personalized, fun-filled and gamified experience," he said.

DealShare claims its 6 lakh-7lakh monthly active users use its app over 40 times a month. So far, it has serviced more than 3 million consumers and over 20 million orders. It plans to expand from  20 warehouses across 5 states to over 200 warehouses across 10 states by end of this year.

Tiger Global's Griffin Schroeder said the startup combines discovery-led social sharing, group buying, and a gamified shopping experience with a simple consumer interface. "They are well-positioned to power the next wave of Indian e-commerce growth,” he said.

Sourjyendu Medda, who is DealShare's Chief Business Officer and Chief Finance Officer, DealShare, said the startup is confident of hitting a $1 billion GMV run rate by the end of the year and is very close to breaking even.

DealShare competes with the likes of Meesho, Shop101 and BulBul.