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B2B grocery marketplace Jumbotail raises Rs 75 cr debt, Retail News, ET Retail

New Delhi: Food and grocery marketplace, Jumbotail has raised Rs 75 crore in debt from Alteria Capital and Innoven Capital, the company announced on Tuesday.

“We will strengthen our leadership position by going deeper into our existing markets and expect to hit full operational profitability across our entire network in the next 12 months,” said Ashish Jhina, co-founder and COO of the company.

The e-tailer plans to use the funds to build sourcing capabilities and invest in AI-driven technologies to drive higher customer wallet share and further grow their net revenues by 100 per cent, on the back of going deeper in the cities to connect with kiranas and retailers.

The company targets to expand its retailer base and reach over 80 per cent of penetration of the addressable market from the current 60 per cent in the next 12 months.

“We have witnessed Jumbotail execute sustainable growth at scale, with a strong focus on profitability and capital efficiency. We are more than confident that Jumbotail will emerge as the clear market leader in the $500B kirana b2b food and grocery market,” commented Ankit Agrawal, managing partner, Alteria Capital.

Jumbotail raised USD 85 million in a series C round in December 2021. The grocery retailer has raised a total of USD 125 million from investors including Invus, Heron Rock, VII Ventures, Nutresa, Veronorte, Nexus Ventures, Kalaari Capital, Jumbo Fund, Arkam Ventures. Before this round, the brand raised another USD 4.8 million in debt from Alteria Capital.

Jumbotail is eyeing to achieve operational profitability in the next 12 months. Explaining how the company aims to achieve this, Jhina told ETRetail that one-third of the e-tailer’s business, especially from older cities is already operationally profitable. “We have grown our presence across cities and doubled our revenue in the last 12 months, this is a continuation of our strategy,” he said highlighting that as cities mature, the density and frequency of orders go up, which is a big focus for the brand.

Answering why the company has managed to achieve this quickly, he said that Jumbotail is a 100 per cent app-based platform, which is very unique in this ecosystem. Explaining further, Jhina said that for an app-only platform, the costs are much lower.

“Our 60-80 per cent of orders come from cohorts of customers with a minimum buying frequency of 9-10 times every month. With this kind of density, the costs come down and we have managed to gain a share of the wallet. Our goal is to continue to do this.”

Commenting on costs, he said that Jumbotail’s customer acquisition cost is very low. Typically, the cost of acquiring customers is Rs 100-150. But with a digital journey, the cost of follow-up, getting orders, and growing share of wallet becomes nil, Jhina added.

Its competitor, ApnaKlub, a b2b wholesale FMCG startup, raised an additional USD 6 million in January this year, followed by a USD 10 million fundraise late last year.

Udaan, which had also raised funds in debt and convertible notes last year amid a tough funding environment, has been focusing on cost efficiency. The company announced last year, that it has achieved positive unit economics and reduced its cash burn.

Another key player in the ecosystem, Dealshare, said earlier this year that it is rethinking its business strategy and focusing on driving profitability and capturing a larger market share. The company, as per its founder, has reduced cash burn to less than 40 per cent and extended its cash runway to four years.

Jumbotail is a B2B online marketplace that connects FMCG and staple brands with more than 2.5 lakh kirana stores across 50 plus cities. It has its own warehousing and last-mile delivery supply chain and offers deliveries to kirana stores in 24 to 48 hours. Additionally, the company offers credit facilities to kirana store owners.

Jumbotail also has a new retail platform that transforms kirana stores into omnichannel grocery stores under the J24 brand.

According to RedSeer Consulting, India’s retail B2B market is projected to grow at a CAGR of 10 per cent to reach USD 1.3 trillion by FY25. eB2B is expected to be the fastest-growing segment with a CAGR of more than 80 percent.

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