The Abu Dhabi Investment Authority is funding DealShare, an Indian social commerce firm, the two announced on Thursday, joining a growing list of high-profile investors betting big on India’s fast-growing e-commerce business.
DealShare has received a $45 million investment from a wholly-owned subsidiary of Emirates’ sovereign wealth fund, bringing the total value of the Jaipur-based startup’s previously announced Series E financing round to $210 million. The prior round, which took place in late October and valued DealShare at $1.7 billion, brings the total amount raised to $393 million.
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To reach the multitudes, DealShare is “gamifying and socializing the elements of purchases,” stated Rajat Shikhar, the startup’s co-founder and chief product officer, in an interview with TechCrunch. These strategies include incentivizing customers to buy in a group and inviting their friends as well as “bargaining” on prices, he said.
“We provide very high engagement on the platform because we are serving customers who are not so tech-savvy and have historically not made online purchases,” he continues.
DealShare has been able to significantly cut its customer acquisition and order fulfilment expenses by incentivizing users to refer their friends to the site, he added. Customers on the platform can also negotiate rates with the system, a practise that is common in physical stores.
To keep its service affordable for clients, the business collaborates with local brands and runs its own ecosystem of in-house private labels, he said. DealShare, which has been around for three years, handles over 400,000 orders every day and is “on the verge of hitting $1 billion in gross revenue run rate.”
“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,” shared Vineet Rao, co-founder and chief executive of DealShare, in a statement.
The stakes are high in the world’s second-largest internet market, where e-commerce has hardly registered a dent in overall retail.
According to experts at Sanford C. Bernstein, the social commerce sector alone is anticipated to be worth up to $20 billion by 2025, up from around $1 billion to $1.5 billion last year. “In India, social commerce has the potential to empower over 40 million small business owners.” “Today, 85 percent of social commerce sellers are small, offline merchants who use social channels to open up new growth options,” they stated in a report for clients.
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The day Walmart acquired Flipkart, DealShare began its journey. The company started as an e-commerce platform on WhatsApp, with hundreds of products available to customers.
DealShare is also planning to expand to several international markets, including the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain. “We are likely to hit $3B of gross revenue run rate in the next 12 months,” said Sourjyendu Medda, co-founder and chief business officer, in a statement.
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“India’s e-commerce ecosystem is developing rapidly, and DealShare is addressing an underserved and growing segment within it. This investment aligns with our approach of backing innovative businesses with differentiated business models to execute on their growth strategies,” said Hamad Shahwan Al Dhaheri, Executive Director of the Private Equities Department at ADIA, in a report.
