Kobster – Raising funds through LetsVenture
Kobster, a tech-enabled sourcing platform facilitating businesses to buy goods online has recently raised their Pre- Series A round led by Incubate Fund. Others participating in this round are Chandigarh Angel Network, ANME (Angel Network Middle East) and investors on LetsVenture.
Founded by Karthik Ramaiah, Mohan Gayam & Vineet Neeraj and incubated by PayPal’s prestigious Start Tank Programme, Kobster is working towards a vision to streamline the corporate indirect purchases space with the help of their own cloud based e-procurement tool called “Kobster Elite”. Kobster is a full-stack company and focuses on end-to-end solution including last mile fulfilment. Kobster also claims to be operationally profitable.
Mid and large enterprises see a value here to switch to a digital platform. This is because the company claims to reduce 15-20% on indirect cost and increase the efficiency by 30-40%.
What started in Chennai, Kobster today has the capability of serving customers PAN India. The company is physical present in Chennai, Bangalore, Mumbai, Delhi/NCR, Hyderabad and Pune. Kobster has partnered with 5000+ brands and vendors. Doing so, it offers over 1 Lakh products across stationary, housekeeping, pantry, electronics, etc. A pioneer in Indian B2B e-procurement industry, Kobster is serving more than 100 traditional and new age corporates. Its portfolio includes companies like Oracle, Altisource, MindTree, Virtusa, Urban Ladder, amongst others.
Nao Murakami from Incubate Fund, an investor in Kobster said, “In India, office supply and MRO market are highly fragmented and still most of them do offline transactions. So if someone brings in efficiency by technology and internet to the markets, such business would grow and we believe Kobster is one of such startups.”
“We believe this market meets three important things for B2B commerce to grow – high frequency of order, large enough ticket size, and high retention rate of customers. Kobster has been been growing steadily for last 24 months. Also, especially as we are VC fund originally from Japan, we know some successful ventures in this space such as Askl and Monotaro so we are confident on the business model. For this type of business, execution and operation is important and Kobster team is really “feet on the ground” and “operation focused” team and that is why they can now operate in 6 cities.”
Corporate procurement is one of the fast evolving industry (FEI) in recent times. According to Global Business & Spending Outlook Survey commissioned by American Express; “About 40% of CFOs said that they are likely to invest more than last year. This is to improve administrative process efficiency and streamline financial and procurement processes. This will help meet business objectives.”
95%+ Indian corporates are still sourcing products in a traditional way. Kobster believes that these companies would soon adopt digital platform to source products. Hence, there is a huge opportunity to be tapped.
Shanti Mohan, Founder and CEO of LetsVenture said, “In India, most of the business procurement happens in the traditional offline way. There is huge potential to organize this market and bring transparency in quality and pricing. Kobster founders have proven their mettle by onboarding marquee clients and growing at a steady rate. I’m very confident of their operational expertise. Surely this fundraise will help them scale to the next level.”
The startup also counts Mr. Murugavel Janakiraman (Founder and CEO of Matrimony.com), Mahesh Parasuraman (Co-Founder & Partner at Amicus Capital Partners), Kishore Ganji – (CEO Astir IT Solutions Inc) & Splice Capital among its investors. The startup is also looking for Series A round to fuel growth and expand to Tier 2 cities. The company will strengthen category offering, build advanced technology features and penetrate deeper into the customer base.