Arzooo secures another $70m to bring ‘best of e-commerce’ to Indian retailers

Arzooo, a B2B retail startup in India that aims to bring the “best of e-commerce” to physical stores, has secured $70 million in a new financing round to develop its tech infrastructure and expand business across the country.

The Bengaluru-headquartered startup, founded by former Flipkart executives, has raised over $85 million across different rounds to date.

The latest round, which values the startup at $310 million, was led by SBI Investment and Trifecta Leaders Fund. Tony Xu, founder of Doordash, Celesta Capital and 3 Lines VC also invested in the new round.

Arzooo works with big brands to secure large inventories and sell and deliver them to retail stores at better prices, helping them compete with large format retail stores like Reliance Retail and Croma and e-commerce players like Amazon and Flipkart.

Arzooo currently operates in the consumer durables and electronics category and provides stores with access to over 10,000 different products. The company, which competes with startups such as DotPe, SignCatch, and Delivery acquired-Primaseller in the retail tech segment, claims that it works with over 30,000 retail stores across 22 Indian states.

“The consumers who have been walking in and walking out of these stores because of the pricing, we are able to help address it,” Khushnud Khan, co-founder and chief executive of Arzooo, told TechCrunch.

Arzooo has reportedly developed its own logistics supply chain network for last-mile delivery of inventories. The startup claims that it provides retail businesses with working capital.

“These are the stores that fall in the lowest slab of the value chain. They don’t have access to as good margin chain as say Reliance Retail and Croma and Amazon. They are getting sandwiched between the two,” Khan said. “Arzooo is able to deliver these stores at better prices because it is cutting several intermediaries from the equation.”

According to TechCrunch, these stores clock between $12,500 to $19,000 of sales each month and power 75% of all consumer durable purchases in India.

“Arzooo’s business model is very capital efficient and can meet the increasingly diversified requirement of both retail shops and end customers. It is also great for them to have built a self-branded functional logistics system, which is one of the most important parts of the business,” Yoshitaka Kitao, chairman and president of SBI investment said in a statement.