Supply Chain Startup Wheelocity Bags $15 Mn Funding

Wheelocity, a supply chain network facilitator for fresh products, raised $15 million (INR 126.5 crore) in a Series A2 funding round led by current investor Lightspeed. Alteria Capital, Anicut Capital, and the company’s creator, Selvam VMS, also participated in the funding round.

The company intends to expand beyond basic categories like fresh fruit and groceries, into non-food FMCG items, staples, household essentials, and other discretionary products.

Selvam VMS and Senthil Kumar founded the supply chain firm in April 2022 with the goal of solving supply chain difficulties in India’s fresh commerce.

The firm began as a B2B model, working with ecommerce players, before pivoting in October 2023. Its present business plan focuses on developing an ecommerce platform for semi-urban and rural markets.

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With this capital, the firm intends to grow to 20,000 towns and villages over the next 12 months, with a target audience of 10 million people. Currently functioning in Tamil Nadu, it plans to grow into South Indian states such as Karnataka, Telangana, Kerala, and Andhra Pradesh.

Wheelocity will also invest in improving its technology stack to provide more efficient and accessible services to semi-urban and rural customers. According to the corporation, this expansion will be fueled by technological innovations, a direct reach network, and increased teams in category management, operations, product, and engineering.

To date, Wheelocity has raised $27 million. In 2022, the business raised $12 million in a Series A investment headed by Lightspeed Venture Partners, with participation from Anicut Capital. The finance consisted of a combination of equity and venture debt.

Selvam VMS, founder and CEO of Wheelocity, stated that the company’s mission is to create a commerce environment tailored to these areas, taking into consideration their unique difficulties and potential.

According to the CEO, Wheelocity’s primary competitors are weekly haats and local kiranas. Weekly haats are only open once a week and require customers to travel 3-5 kilometers, whilst local kiranas have a limited selection and freshness. Wheelocity, on the other hand, provides a better answer by being available seven days a week, providing doorstep delivery, having a larger range, and using fresher produce.

“We achieved product-market fit between February and March of this year, when we were present in only 30 communities. We are now present in 3,500 communities and have grown significantly. Over the previous six months, we have scaled up by 100X. “Our next goal is to reach 20,000 villages within the next year,” Selvam told reporters.

The business uses a “phygital” (physical plus digital) approach to serve semi-urban and rural clients in India, addressing the limited access to vital products in these regions. Currently, with a concentration on fresh and grocery products, the company distributes daily to cities and villages via a high-frequency supply chain. Customers can place orders using a mobile app or make purchases straight from three-wheeled electric carts that enter their towns.

“This offline presence builds trust with consumers, encouraging them to gradually shift to online purchasing,” said the company’s president.

India’s semi-urban and rural markets provide a $1.1 trillion opportunity, driven by rising smartphone use and improved internet connectivity. However, according to the company, existing players face three challenges: fragmented demand, diverse consumer preferences, and limited market penetration.

Wheelocity intends to overcome these challenges by offering high-frequency direct access infrastructure, beginning with basic commodities and progressing to discretionary categories.