Roll-up ecommerce flexes its muscles in India

Indian businesses have long been inspired by US companies: India’s Cars24 followed the Carvana business model; Ola set out on the path that Uber paved, and Flipkart became a homegrown contender to Amazon. All these Indian firms have turned into unicorns.

Now there’s another race heating up: Startups are vying to become the next Thrasio, a pioneer in the ecommerce roll-up space.

Neither Thrasio nor ecommerce roll-up firms really rang a bell in the country a few months ago. But the trend has suddenly gathered steam.

This year alone, the South Asian nation has seen nearly a dozen roll-up ecommerce startups crop up, which has attracted over US$300 million from top investors including Tiger Global, SoftBank, and Accel.

Race to be the next Thrasio

Like roll-up appetizers, which are filled with bits of different ingredients wrapped within a thin tortilla, roll-up firms in the digital world buy up smaller companies that offer common goods and services and bring them all under one umbrella.

Roll-up firms pool together fragmented market resources, infrastructure, sales, marketing, and workforces, Nandini Mansinghka, co-founder and CEO of Mumbai Angels Network, tells Tech in Asia.

“Once [smaller companies’] resources are united into one consolidated firm, it automatically enhances the overall equity value,” Mansinghka adds.

See also: Why these ex-Carousell, Fave execs raised $36.5m to join the global Amazon roll-up frenzy

The phenomenon is similar to creating a set of brands – something that traditional companies have done for ages.

Case in point: Unilever, the fast-moving consumer goods major, owns and operates brands like Dove, Lipton, and Axe under a single banner. This reduces the group’s overall fixed costs by centralizing inventory management and warehousing, among other things.

The opportunity for ecommerce roll-ups was first spotted in 2018 by US-based Thrasio, which acquired third-party brands listed on Amazon and scaled them up. Thrasio has bagged around US$1.7 billion in funding to date, making it the most well-funded player in the space globally.

Having proven its mettle in the US and Europe, the roll-up strategy is now making news and attracting venture funding here in India, says Poornima Vardhan, co-founder of ecommerce platform 335bazaar.

Many deals in the pipeline

Massive market opportunity

The secret sauce of the roll-up recipe

It’s just getting started