A startup that is improving the way construction and real estate companies in India procure materials and handle logistics for their projects has received the backing of three new investors.
Mumbai-headquartered Infra.Market said on Thursday it has raised $20 million in a Series B financing round. The round was led by Evolvence India Fund, Sistema Asia Fund and Foundamental, while existing investors Accel, Tiger Global and Nexus also participated. The four-year-old startup has raised about $50 million to date.
Infra.Market helps small businesses such as manufacturers of paints and cements improve the quality of their production and meet various compliances. The startup adds its load cells to the manufacturing facilities of these small businesses to ensure there is no lapse in quality, and also helps them work with other businesses that can provide them with better raw material and provide guidance on pricing. It also works closely with businesses to ensure that their deliveries are made on time.
These improvements, explained co-founder Souvik Sengupta, help small manufacturers land larger clients that have higher expectations from the businesses with which they engage.
“We are bringing a service layer to these small manufacturers, enabling them to grow their business. We don’t own the asset and are creating private label brands,” he said in an interview with TechCrunch. Infra.Market today works with more than 170 small manufacturers and counts the vast majority of major construction and real estate companies such as giants Larsen & Toubro, Tata Projects and Ashoka Buildcon as its clients. Sengupta said the startup sells to more than 400 large clients and 3,000 small retailers.
Sengupta said the startup was on track to hit the ARR (annual recurring revenue) of $100 million before the pandemic, which for at least two months nearly cut its business in half. But the startup has picked up pace again, and is now on track to hit the ARR of $180 million. The startup aims to grow this figure to $300 million by March next year.
Infra.Market is also enabling small manufacturers to reach customers outside of India. Some of its clients are in Bangladesh, Malaysia, Singapore and Dubai. Sengupta said Infra.Market will deploy the fresh funds to expand to more markets as well as deepen its penetration in smaller Indian cities and towns. International markets today account for 10% of the revenue Infra.Market clocks.
“As an enabler to this sector, Infra.Market has emerged as one of the most disruptive companies through pioneering technological innovation in the procurement and distribution of building materials catering to the infrastructure and construction industry by improving logistics, financing, procurement and project management of large scale projects in key markets across India. The company has very quickly demonstrated remarkable growth backed by a solid business model and deep sector domain knowledge of its founders and management team,” said Rohit Batra, partner at Evolvence India, in a statement.
The startup, which today runs about half a dozen private label brands, also plans to expand to more categories such as electrical items, Sengupta said.
Sumit Jain, senior partner at Sistema Asia Fund, said Infra.Market is increasingly serving as an important institution in the context of India’s bounce-back in the post-COVID world.