Business Model & Success Story of ElasticRun – The Unicorn
ElasticRun is a Pune-based B2B eCommerce platform for rural India. The company is responsible for directly distributing networks to deep rural markets in the country. It is India’s eCommercial platform that is responsible for opening up fresh new opportunities for brands to make their products available to customers in rural areas.
It was not just a risk but also a huge time-consuming method for brands to make their products available in rural parts of the country but now with the services of ElasticRun, things have become much easier for both the parties (consumers and companies).
| 1 | Website | http://www.elastic.run |
| 2 | Industry | Technology, Information and Internet |
| 3 | Company size | 1,001-5,000 employees |
| 4 | Headquarters | Pune, Maharashtra |
| 5 | Founded | 2016 |
ElasticRun was founded back in the year 2016 by Sandeep Deshmukh, Shitiz Bansal and Saurabh Nigam. Mr. Sandeep Deshmukh is an alumnus of IIM Ahmedabad and with his knowledge in business he was able to create a strong business model and solve a crucial problem that the rural society was facing in the country.
What Is ElasticRun Business Model?
It is a huge challenge for companies to introduce its products to every corner of the country which was basically the result of being unorganized. ElasticRun was introduced as one of the new age ecommerce platforms to provide solutions to the challenges being faced by brands.
ElasticRun network primarily worked on helping eCommerce brands and companies reach the customers deeply in rural areas where it was almost impossible to reach. With the help of the crowdsourced logistics network that ElasticRun had companies and brands were able to penetrate the rural market and introduce their products to them.
The data that is generated on the ElasticRun platform allow financial institutions to bring in maximum number of rural stores as their SME customers. With the same set of data helps brands and companies to further sharpen their marketing offerings to the rural markets.
The company has two main revenue streams where the larger part was the trade of wholesale goods and the second one was revenue of freights distribution and logistics. The company had to keep in mind the cost and as well as the availability of the products so that they could deliver it to kirana stores in far flung areas.
How Does ElasticRun Operate?
At the initial stages of the company, they had started off solving for the middle and last mile for the e-commerce companies and a couple of FMCG brands. The problem identified by the founders and co-founders was that any kind of e-commerce company or any FMCG brand requires heavy investment on assets. Setting up warehouses, middle mile stockist, commercial vehicles, personal manning and such which makes the investment huge.
ElasticRun pitched to some of the e-commerce companies during its initial stages and FMCG brands to build out a network by using already existing assets on the ground. ElasticRun partnered with brands and as well as local kirana stores and other manpower needs and stitched them together and helped penetrate the far flung areas. The products that brands and companies introduced in the market may not have been reached the rural areas which was also an opportunity for brands to penetrate a new market.
ElasticRun works on fragmented assets which are warehouses, trucks, stockists etc. The company finds empty spaces in trucks, kirana stores, warehouses for storing and delivering purposes. The e-commerce platform helped emulating a physical network on the cloud which is also called a virtual network. Now, the company has branched out its services to other industries where Pharma sector, automotive sector, food sector, have become a part of ElasticRun to provide its products in the deeply unorganized and untouched market.
What Is The Revenue Of ElasticRun?
It was in financial year 2021 that the revenue jumped to 2.14 times to almost close to INR 1000 crores. The company has now expanded its services where they got an aggregate supply from over 400 FMCG brands and offer their logistics services to about 80,000 villages across 26 states in India. ElasticRun became one of the rare unicorns that shown fiscal discipline because the company has a fairly detailed expense breakdown visualization.
Official reports of the filings made by them with the Ministry of Corporate Affairs, the company was able to generate a revenue of INR 3,487 crore through the sale of products in Financial Year 2022. On the other hand, ElasticRun had earned INR 325.4 crore just through the sale of its services. The exact revenue that the company earned in FY 2021 was INR 841.5 crore which was made from sales of products. On the other hand, the revenue earned from services was at INR 293.3 crore during FY21.
Within a couple of years after its formation, ElasticRun became one of the most operationally profitable businesses. The expansion and partnerships was also one of the biggest factor for the company’s huge profit and revenue earning each year.
ElasticRun Competitors
ElasticRun’s services solved a massive problem that the rural society was facing for years. But, as people say where there is demand, the supply in that area will also increase. The biggest competitor for ElasticRun was a giant B2B business, Udaan. It was also a threat for ElasticRun that what if major players or new players targeted the kirana stores and what would happen if the consumer behavior changes.
Udaan was India’s biggest B2B e-commerce by far. The company had shipped over 260 million products across thousand towns and cities in the country. Only in the year 2021, Udaan was able to get 5 lakh new retailers. Udaan might be ignoring the rural areas which ElasticRun has targeted but Udaan has got an enormous technical structure.
ElasticRun Latest News
ElasticRun is currently making a buzz in the news and all across social media as well. The company is being to able achieve new milestones each year by not just partnering with new brands and companies but in terms of financial achievements and investors as well. The following are some of the latest news highlights made by ElasticRun.
- Last month in Feb, the company raised a whopping amount of $330 million which was a funding round led by Softbank, Prosus Ventures, and Goldman Sachs.
- After the funding round, the valuation tripled from $400 million to $1.5 billion as told by the co-founder and CEO of the company, Mr. Sandeep Deshmukh.
- Just earlier this month, ElasticRun had made key appointments to its leadership team where Pankaj Roongta has joined the company as the Chief Financial Officer from Westlife Development Ltd (McDonald’s).
- ElasticRun in FY 2022 had spent INR 3,431 crore on purchase of stock-in-trade which was a 327% increase from INR 803.6 crore in the previous year.
ElasticRun Valuation
The valuation of the company tripled when they achieved their latest round of funding that was led by Softbank, Prosus Ventures and Goldman Sachs. After the funding round, the co-founder and the CEO of the company Sandeep Deshmukh had said that the valuation was $1.5 billion which had jumped from $400 million.
ElasticRun Investors
- Goldman Sachs (Recent) 2022
- Softbank Vision Fund (Recent) 2022
- Prosus Ventures
- Kalaari Capital
- Avataar Ventures