DealShare raises $165 million funding led by Tiger Global

Social commerce startup DealShare said it has raised $165 million at a valuation of $1.6 billion, giving it the unicorn tag, as the funding spree continues, even as listed technology stocks got hammered in the last couple of weeks.

This was the first close of the 3-year old's startup's Series E fundraise. Apart from existing investors such as Tiger Global and Alpha Wave Global, new investors such as Dragoneer Investments Group, Kora Capital, and Unilever Ventures participated in the round. In its last round of funding six months ago, DealShare was valued at $455 million, quadrupling its valuation in less than a year.

The company said it expects to hit $1 Bn in revenues in the near term and will use the money raised to invest in technology and data science, as well as building out its logistics. It is also planning to offline, with a store franchise network.

DealShare, founded in September 2018 by Vineet Rao, Sourjyendu Medda, Sankar Bora, and Rajat Shikhar, is focused on bringing an online shopping experience to first-time internet users in India's hinterlands. The founders believe there is an opportunity to build a different kind of online commerce for the mass market population in Tier 2 and Tier 3 towns with a monthly household income of less than Rs 50,000.

It is estimated that 70-80 percent of the wallet spend in this target segment goes towards basic essentials, and the stock keeping units are far lower than what one would see in the metros. It wants to do what discount retailer DMart did with physical retail, in terms of expanding the total addressable market beyond the top 5 percent of India's population, by bringing quality products at low prices.

The startup uses two ways to bring down the cost of essential products for the mass market segment- it directly sources household items of lesser-known brands in smaller towns from the factories, thereby cutting down on distribution and channel sales. It uses platforms such as WhatsApp and Telegram to build on its customer base and gives group-buying discounts on these essentials. It also uses a network of influencers to make deals viral and offers consumers incentives to share product deals with their friends.

DealShare competes with the likes of CityMall, Meesho, Shop101, and BulBul. It is India's 5th unicorn in 2022, after Mamaearth, Fractal, Lead School, and Darwinbox.