While India's urban population is shifting away from mom-and-pop stores to quick commerce platforms, rural India, home to more than 800 million people, remains heavily dependent on offline businesses for daily consumption. Wheelocity aims to transform this untapped market and make it easier for people living outside the top 200 cities in the country to shop online.
Founded in September 2021, the Chennai-headquartered startup pivoted from its previous B2B supply chain business for quick commerce platforms to building a platform that solves e-commerce access for people living in semi-urban areas. Moved. and a rural area commonly referred to as 'Bharat'.
E-commerce giants Amazon and Walmart Inc.'s Flipkart have long sought to exploit rural India to penetrate deeper into the world's second-largest internet market after China. The region has also attracted startups such as Meesho and Rozana. However, Wheelocity founder and CEO Selvam VMS told TechCrunch that no one was able to break into that space due to access issues.
“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 consumers.”
Wheelocity began the transition by offering fresh products such as vegetables, fruits, and groceries through its app. However, unlike traditional e-commerce platforms that sell products online, this startup takes a “physical” approach. This also includes electric tricycles for startups to physically take their products to villages every day to gain consumer trust. These vehicles allow consumers to place orders using Wheelocity's app and have them delivered to their doorstep.
VMS predicts that once consumers become accustomed to it, they will begin using the Wheelocity app at home.
The executive added that unlike Weerocity, which does doorstep deliveries every day, other e-commerce platforms take up to a week to deliver goods in the same area. This makes it difficult to deliver fresh supplies and groceries.
Wheelocity leverages existing supply chains built for previous B2B businesses to deliver freshly produced goods and groceries to customers faster. After sourcing products from third parties, including farmers, the products reach consumers with Weelocity branding.
VMS sees this shift, which quietly began in October 2023, as an opportunity worth more than $1 trillion. He declined to provide business-related numbers, but said the startup's retention rate was “very, very good.”
The startup currently offers an e-commerce platform in 3,500 villages in central Tamil Nadu and has a fleet of 1,000 electric vehicles to enable physical ordering and delivery. It has already set up an operational office in Trichy, a tier-2 city in Tamil Nadu, to better understand consumer purchasing behavior and get feedback. Next, it plans to expand its operations to 20,000 towns and villages in the next 12 months, expand to all five southern states of India and reach 10 million consumers with its platform.
Existing Wheelocity investor Lightspeed is backing the latest move by leading a $15 million Series A2 round. In July 2022, the VC fund led the startup's $12 million Series A round.
Alteria Capital, Anicut Capital, and VMS also participated in Wheelocity's fresh round. In addition, this round includes an undisclosed amount of debt primarily intended to finance electric vehicles.
Rahul Taneja, a partner at Lightspeed, told TechCrunch that the VC fund decided to reinvest in Wheelocity because the market is so large and untapped that the startup is “in a field that was historically impossible. This is because they have created a unique business model that allows them to provide highly profitable coverage.
Taneja said the founder's qualities and passion for building a “profitable business” before pivoting also helped persuade Lightspeed to close the deal.
Shifting focus to small towns and villages in India is an emerging trend in the VC market, as consumers in these regions often have more disposable income and are more willing to buy. Earlier this year, Accel began looking to the region to find future unicorns.