Dealshare – The Fastest Growing Social E-commerce Giant of India! – Founders & the Team, Business & Revenue Model, Expenses Breakdown, Funding, Investors & Investment, Growth & Challenges, Competitors, Future Plans

1. Overview

Interestingly, in recent years there has been a significant rise in the growth of e-commerce businesses that offersliterally everything from food, clothing, makeup, cleaning supplies, groceries & even fresh fruits, vegetables & dairy, etc. making businesses like Amazon, Flipkart, Myntra, Nykaa, etc a household name, especially in Tier I & Tier II cities in the country. However, people belonging to smaller towns & regions are still reluctant to use such apps due to lack of knowledge of its benefits, its inaccessibility due to limited areas of delivery &unaffordability of products online. Thankfully, Dealshare was launched to offer affordable value-for-money products online to people belonging to lower income groups in remote towns & cities of the country where even Amazon & Flipkart have failed, thus disrupting the e-commerce industry of India.

Dealshare is the fastest growing hyperlocal business that provides an online platform offering multi-category consumer items at reasonable prices & exclusive discount offers for group purchasing especially in the Tier II & Tier III cities & towns, who are still to learn about the usage of digital and online platforms other than the traditional brick-and-mortar models.

Founded in the year 2018 by a group of four close friends & passionate entrepreneurs – Rajat Shikhar, Sankar Bora, Sourjyendu Medda and Vineet Rao, the start-up has its headquarters in Bangalore, but maintains offices in more than 25 cities across these states. This social commerce start-up has registered a remarkable growth giving a strong competition to the already established e-commerce giants in such a short span of time.

After raising a sum $210M in its Series E funding round led by investors like Tiger Global and Alpha Wave Global in Jan 27, 2022, it entered the unicorn club at a valuation of $1.6B becoming the fifth unicorn start-up of this year Read further to find out more about the start-up, funding & investors, business & revenue model, growth & challenges and many more.

2. DealShare – About & how it works?

According to a study the social commerce market in India is expected to grow at a CAGR of around 55-60% Y-O-Y reaching $ 111 billion by 2024 and US$ 200 billion by 2026.Bernstein, a USA based private wealth Management Company stated last year “Social commerce in India is capable to empower 40M+ small entrepreneurs & businesses in the country”. Currently, more than 85% of the sellers (including smaller & offline retailers) are using social media channels to gain new consumers, expand their business & open new growth opportunities.

DealShare is a hyperlocal retail business that offers an app-based buying platform which is intended to help people to purchase multi-category consumer goods which includes groceries, beauty products, fruits and vegetables, home decor, electronics, accessories, etc. For which, it targets the middle-income section of population through a community group buying model.

Not only this, Dealshare allows its users to buy & share deals with their friends, enabling customers to purchase its products at a cheaper rates and offering exciting discounts & offers such as free home delivery, easily with a just couple of clicks.

Rather than multinational brands, Dealshare primarily focuses on locally manufactured products, and to date around 80- 90 per cent of the products sold on its platform are regionally produced. Thus, the start-up works on a low cost high impact model aimed towards transforming e-retail for the coming generations.

Through its comprehensive platform, Dealshare aims to target consumers from non-metro cities and rural market spaces who haven’t shopped online & are still uncomfortable to use  other platforms and offers them high-quality & low-priced essentials coupled with a gamified, fun-filled, and virality-driven shopping experience, making it easy for first-time internet users to experience online shopping.

3. Dealshare – Story of inception

Around the year 2018, the founders noticed that despite the availability of various e-commerce retail businesses, there was a section of low income buyers in large cities & value conscious consumers in small towns who were not tech savvy or almost hadn’t used online shopping. Even businesses like Subhiksha & Big Bazar had failed to do any charm.Aditya Birla’s More,Online players—Grofers, BigBasket, Milk basket—have also had to pivot their business models multiple times indicating something was clearly missing in the picture.

The Boston Consulting Group estimates India’s retail industry at $800 billion though growing at a rate of 25% each year, yet organized players were holding a market share of 8-10% apart from purely online retailers holding sub-1 percent share, while growth rates in excess of 50 percent which showed that despite huge prospects the market was underpenetrated.

Thus, Dealshare set out to address this challenge with its four co-founders – Vineet Rao, Sourjyendu Medda, and Rajat Shikhar & Sankar Bora and all of them had gathered knowledge & years of experience in marketing & sales industry. While Founders Sourjyendu and Vineet were school friends, and they were introduced to Sankar through a common friend and Rajat joined them later in their journey.

From his professional experience, Medda was quick to realise that the market system was unorganized but the local manufacturers & supplier had higher capacity to work on volumes, while Vineet pointed out that the retail commerce was adopting faster transformation with changing advanced technologies like AI & Machine Learning coupled with social e-commerce, which could in fact help businesses to establish a better connect with the consumers quickly and create awareness about the platform. Thus, both the founders developed a demo model.

During the initial months, the start-up administered its business through a What’s app group since it didn’t had its own app at that point. They started the business with a small group of 100-150 customers including friends & family in Jaipur, and had their breakthrough with 20,000 customers which exceeded further eventually with overwhelming responses. In the beginning, the Dealshare would receive orders during the week & deliver them on weekends, without having to invest much. This initial success made them realise that they were onto something bigger & solving a bigger problem for a large group of people.

Subsequently, they discussed their plan with Sankar Bora and Rajat Shikhar to come together to create DealShare. The Dealshare app was created only after they were sure that consumers choose their online services repeatedly in case the app usage was uncomplicated. Today, Dealshare has 1M+ downloads on Google Play Store.

4. Dealshare – Founders & the Team

Vineet Rao

Vineet Rao is the Co-founder & Chief Executive Officer of Dealshare. He completed his B.Tech in Computer Technology from IIT Bombay in the year 2000.After which, he started his career as a developer & founding member of Trilogy India, an IT solutions company based in USA, and went on to work with prestigious companies like Microsoft and SkillCloud. He is also a serial entrepreneur and founded two more start-ups namely Shopwest & SpectraVR Studios before finally founding Dealshare.

Sourjyendu Medda

Sourjyendu Medda, is the Co-Founder& Chief Commercial Officer at Dealshare holding years of experience in sales & marketing. He completed his Bachelor of Engineering from NIT Jamshedpur & earned an MBA degree in Marketing from National Institute of Industrial Engineering. He started his career as a Management Trainee in Britannia Industries, and went on to work on marketing lead positions in Citibank, Metro Wholesale & J.K.Helene Curtis (Raymond FMCG), before co-founding Dealshare.

Rajat Shikhar

Rajat Shikhar is the Director & Co-founder of Dealshare. He completed his B.Tech from IIT Roorkee and went on to complete his MBA in strategy & marketing systems from IIM Indore. He started his career as a System Engineer in TCS, and went on to gain years of experience in the e-commerce business while working for companies like Myntra, Jabong, food panda, as a domain leader in Thought works, GoFro, etc. Apart from Dealshare, he also founded BuzzL.in an O2O platform facilitating discovery of fashion in local stores.

Sankar Bora

He is Co-Founder, Chief Operating Officer of Dealshare. He completed his graduation from NIT Calicut and pursued a diploma in marketing from IIM Bangalore. Like Rajat, Sankar also possesses years of experience in marketing & sales operations having worked in companies like Myntra &AEON Learning. He also co-founded MiraiStore.comluxury shopping platform that provides designer clothing and accessories for men and women, and acted as a Mentor& strategic investor in Flamingo Hospitality Services Pvt. Ltd.

5. Dealshare – Business & Revenue Model

Interestingly, the business model of Dealshare is closely based on the China’s Pinduoduo business model. The Pinduoduo model of China encourages group purchasing & sharing them among friends & families, which in turn entices the others & the chain goes on and on.

DealShare works on a B2B2C hyperlocal discovery-led business model that allows its consumers to choose from the best offers for everyday use consumer goods at a price lower than wholesale prices. It operates in more than 100 cities and claims to have catered to 1.5M+ customers till date with 20M+ downloads from Google Play store.

To ensure higher customer satisfaction, Dealshare deploys advanced technologies like AI/ML, through which they look for most relevant recommendations, personalisation and searches. While on the other, they look for deployment of the technologies to improve delivery operations like improving location, routing and forecasting demand, stock movements and fraud prevention.

The Dealshare app user interface is simple & user-friendly which makes the whole process simple, faster & efficient especially for the consumers who are new to internet & e-commerce platforms. By working on key shopping elements like payments, performance and personalisation, Dealshare is focusing on taking the customer experience on the next level.

For non-English speakers, the app is available in regional languages like Hindi and Gujarati, all of which has helped it to get an edge over retail giants like Amazon and Flipkart who have made little to no inroad.

Revenue Model

The social commerce start-up Dealshare caught attention in the Indian ecosystem after successfully turning a unicorn within a short period of less than two years of its existence at a valuation of $1.6B.

Not only this, Dealshare witnessed a massive 312% raise in its revenues from operations reaching Rs 236.8 crore during FY21 from Rs 57.4 crore in FY20,as revealed from the copy of financial statements filed by Dealshare to RoC for FY21.

The founders of Dealshare describe it as a social commerce retail rather than just an e-commerce model. Thus, whenever, a customer purchases anything from the app, he may share the order links with his friends or family who could avail special offers such as discounted prices or exclusive deals. For aged and less technology-friendly customers, the platform offers cost-free home delivery along with cash on delivery options. Dealshare has formed various WhatsApp groups with its existing consumers through which they share latest offers & deals.

6. Dealshare – Expenses Breakdown

Despite a substantial rise in revenue in FY21, the social commerce unicorn also saw a 3X rise in its expenses amounting to INR 306.4 Cr in FY21 as compared to INR 57.4 Cr in FY20. In FY21, Dealshare primarily focused on the wholesale trade of FMCG goods, due to which the costs related to procurement of stock-in-trade turned out to be the largest cost centre for the business accounting for 75.7% of its total annual costs.This cost has grown by 302% last year reaching to Rs 232 crore during FY21 as compared to FY20 in which it was only Rs 57.71 croreon account of increased order volumes.

However, as economies of scale kicked in, the start-up reported improvement in its gross from -0.5% in FY20 to 1.72% in FY21 which is expected to improve further.

7. Dealshare – Funding, Investors & Investment

DealShare has raised a total of $390.3M in funding over 6 rounds. Their latest funding was raised on Jan 27, 2022 from a Series E round. DealShare is funded by a total of 18 investors.

The last tranche of investment came on Jan 27, 2022 in which the start-up raised $165Mfrom investors led by Tiger Global and Alpha Wave Global, which pushed its valuation at $1.6B. Accordingly, Dragoneer Investments Group, Kora Capital and Unilever Ventures are the newest investors in the Dealshare business.

ESOP Pool

In June 2022, it was reported that Dealshare has expanded its ESOP pool base for which the board passed a special resolution. According to regulatory filings, the special resolution from 11,492 options to 20,192 options in total with each option convertible into 1 equity share of Re 1 with the total size of the pool valued around Rs 455.05 crore or $60 million.This move has entered Dealshare included in the list of the start-ups who have expanded their ESOP pool size in this year.

8. Dealshare – Growth & Challenges

Since this inception, Dealshare has been hugely successful in making its mark in in the niche segment it serves in the e-retail space giving a tough competition to its rival businesses. Vineet Rao states “We are in the process of creating the biggest e-commerce story of India, whereas the first wave of e-commerce touched the top cities, leaving the ones in tier II and tier III cities behind”.

However, the journey of achieving this tremendous growth was not easy. In the initial stages of business, they faced immense challenges to set-up the company and expand it. Since, they did not possesses extensive knowledge of consumer behaviour as majority of the e-commerce businesses primarily catered to upper economic section& financially well-off strata of the society. Thus, they had to spend a significant amount of time to understand their target consumers from middle and lower-income families, the largest section of consumers in India to understand their market.

Further, their next challenge was to create a network of local manufacturers & consumers for which they created a WhatsApp group. Since most of the local manufacturers had never envisioned to work on a retail e-commerce business setup. And those who did not had a satisfactory experience. However, today almost 70 per cent of the total manufacturers and suppliers are either regional or local. They also faced hardships to acquire their first consumers since they were entirely were a new set of people who were comfortable with online shopping.

Presently, the business has been expanded to 130 cities over 10 states in the country and has repeated customers due to various WhatsApp groups with over thousands of consumers through which it shares receiving regular updates on best offers every hour. According to Vineet “Dealshare is one of the fastest growing e-commerce companies with around 13X growth in terms of revenues and customer base in the last year”.

9. Dealshare – Competitors

• Glow Road.
• City Mall.
• Meesho.
• SimSim.
• Bulbul Shopping Network.
• Mall91.

10. Dealshare – Future Plans

For the coming years, Dealshare is focusing its next steps towards a combination of growth, expansion of its consumer & regional sourcing network, achieving profitability &and improving its grip over technology over business verticals.According to Sourjyendu Medda, the company is likely to hit $3B of gross revenue run rate in the next 12 months.

With presence in 10 states over 130 cities, the start-up is planning to extend its business presence to over 20 states and more than 300 cities and towns this year. Additionally, the start-up is eyeing international markets starting from United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. Further, the start-up has announced its plans to invest upto $250 million this year to expand its operations. Founder & CEO Vineet Rao stated “Till date we have raised to $340 million, out of which we have invested $100 million and a large amount has been expended in capital expenditure such as purchase of assets & inventory, building warehouses, & GST credits. Similarly, next year we plan to invest another $100M- $250 M into business expansion, strengthening our technology& working capital in FY23.

Finally, Dealshare is also looking to raise additional funds which would be invested in building assets further& acquiring businesses, potentially some smaller brands that could be part of the Dealshare business network & could help it to grow faster. In the coming years, Dealshare intends to further expand & grow its business both organically as well as inorganically. Vineet Rao states “Dealshare is growing rapidly while continuing to improve its unit economics & reduce losses by around by five percentage points at a net revenue level. As it is moving towards profitability, the coming months are coming to be exciting”.