Business-to-business (B2B) start-up ElasticRun is one such firm, which has decided to focus on its core business and wind up expansion projects.
The company had taken this bet nine months ago. However, it has been put off as this would mean higher cash burn and capex investment in order to take on the intense competition from rivals. Some cities where it has wound up include Bhopal, Indore and Delhi.
“We initiated a pilot for serving our customers in urban markets. But during the year, as the macro changed, we decided not to pursue the urban pilot and focus on our core rural business.
ElasticRun extends the reach of a brand’s direct distribution network to deep rural markets. It enables access to new stores and customers for the brands. These were not accessible through traditional distribution networks.
For ElasticRun, its maximum revenue comes from smaller or rural markets.
According to data from Tofler, ElasticRun reported consolidated revenue of ~3,824.9 crore in FY22, a growth of 2.5 times from ~1,0871.1 crore in FY21.
Owing to this roll back, ElasticRun had to lay off employees.
“We are aggressively hiring in rural business. At an organisational level, we have been a net positive hirer for the past few quarters. We are one of the largest recruiters for Indian upcountry markets,” he added.
“Rural segment generates over 98 per cent of our overall business. This business continues to rapidly grow in different geographies,” shares Deshmukh.
“We have raised $330 million last year. Most of this money is in the bank, unutilised. The company has an extremely strong cash position and we are very well-funded for a long journey,” he added.
Some of the brands that ElasticRun works with include Marico, Godrej, Johnson & Johnson, ITC, Britannia and Reckitt Benckiser, among others. ElasticRun has presence in 26 states, reaching out to over 80,000 villages and has over 400 brands.