Mumbai-based B2B tech startup Arzooo, that works with offline retail stores has raised USD 7.5 million in its Series A round led by American VC firms WRVI Capital and 3Lines Ventures. Eric Yuan, founder of video conferencing company Zoom, billionaire angel investor Bill Tai, and Jabbar Internet of UAE also participated in the current round.
Arzooo plans to use the fresh funds to scale its operations in the eastern and western regions of the country and strengthen its technology platform Go Store.
According to local media Entrackr, the estimated valuation of the two-year-old company post the deal is USD 32 million post-money. So far, the company has raised a total funding of around INR 570 million.
Founded by former Flipkart colleagues and IIT Kharagpur alumni, Khushnud Khan and Rishi Raj Rathore, Arzooo offers a technology platform that powers its partner stores to buy consumer electronics at the best price. Currently, it works with over 5,000 stores across ten cities including 100 brands. The company, which counts horizontal players such as Amazon, Flipkart, Udaan, JustBuyLive, and ShopClues and vertical e-commerce companies like Zefo as rivals, is essentially targeting 300,000 physical retail stores to help them compete with online players. The idea is to create an integrated retail network of consumer electronic stores.
The Bengaluru-based startup also offers a digital lending product Arzooo Credit, which it launched in July this year.
With friction between online and offline retail industries growing in the country, B2B tech startups that solve product sourcing problems of offline retailers have become more relevant than ever. They are slowly emerging as a hot spot for global venture capital firms and angel investors.
According to a recent report by NetApp and Zinnov, total VC funding in B2B tech startups in 2019 stood at over USD 3 billion across 415 deals. Overall, last year, there were over 4,200 B2B tech startups in India which comprised 44% of all the startups.
Earlier this week, B2B online marketplace for food and grocery products Jumbotail closed a USD 11 million funding round led by Canadian venture fund Heron Rock. Nexus Venture Partners, Siddhi Capital, Reaction Fund, Pimpernel Holdings, and a group of HNIs as well as industry leaders, the company said.