As startups struggle for funds, ElasticRun co-founder and CEO Sandeep Deshmukh said the B2B startup, having secured a substantial funding round prior to the downturn, has strategically extended its runway to weather the current market conditions.
Having closed $330 million funding round ahead of FY23 when conditions turned bleak for startups to raise money, ElasticRun said to have opted to concentrate on maximising operational efficiency rather than engaging in extensive marketing campaigns, and leveraging its strengths in rural distribution.
“We were fortunate to have raised a large round before the funding winter hit. Due to the current market conditions, we made necessary changes to make sure our runway is far longer. We will remain out of market (fundraise) for some time,” the CEO said during a fireside chat at Moneycontrol's AI Alliance conclave in Pune on March 27.
The kirana-focused B2B ecommerce platform runs distribution for over 400 fast-moving consumer goods (FMCG) brands in rural areas and provides logistics and warehousing services to stores in over 80,000 villages in 26 states.
Its clients includes Dabur, Colgate, Pidilite, Unilever, Britannia, Godrej and Marico.
“At the end of the day, it is an operations and cost game. The moment you term this model as e-commerce game, you go after marketing spends, outside packaging to acquire customers. For B2B, all it matters is that when the excel sheet gets pulled out, it needs to match the business cost. We have stuck to execution and working on right operational costs structures, having spent zero dollars on marketing,” the CEO said.
ElasticRun’s strategic focus on rural markets has proven lucrative, with the majority of its revenue stemming from smaller or rural areas.
“We design products with scalability and cost-efficiency as priorities, finding success particularly in rural markets. While we explore opportunities in urban areas, our primary focus remains on rural regions where our solutions resonate strongly with customers, establishing us as market leaders," Deshmukh said.
Besides intense competition, in the urban areas, there is a robust infrastructure in place with companies having direct distribution, pushing the firm to focus on its core rural business, he said.
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