Retail

Distribution-as-a-service startup ofScale secures $375,000; grocery and gourmet to be next focus area



Bengaluru: Distribution-as-a-service startup ofScale has raised $375,ooo in its pre-seed funding round.

Early-stage venture capitalist First Cheque led the round, with participation from Matrix Partners India DeVC and Relentless VC. Angel investors who participated included Abhishek Goyal (co-founder, Tracxn), Mekin Maheshwari (founder of Udhyam.org & former chief people officer, Flipkart), and Revant Bhate (CEO, Mosaic Wellness).

Founded by Suvigna Shour, Tarun Kedia and Vijay Akkaladevi in late 2022, ofScale’s stated mission is to transform the way brands succeed in physical retail spaces. It leverages a technology-led B2B model to mitigate distribution costs when compared with the traditional means of offline expansion. It is currently assisting beauty and personal care brands in creating an affordable brick-and-mortar presence, with plans to expand to other industries.

According to the Bengaluru-based company, customer acquisition costs for online sales in the competitive FMCG sector rise substantially during the growth phase. This makes it necessary for brands to consider having an offline presence. But this comes with three major challenges: high sales overheads, a longer time to enter the market and maldistribution, which remains a significant problem even after overcoming the first two. ofScale aims to address these challenges through a marketplace model, enabling brands to lease retail spaces in independent stores. By pioneering this approach, it aims to democratise offline distribution, offering brands a seamless expansion into physical retail while mitigating entry barriers.

“For every D2C brand that has found some traction online, offline expansion is the next big agenda. ofScale enables brands to take bite-sized initiatives for their offline agenda resourcefully. Over the last 12 months, over 15 fast-growing beauty and personal care brands have launched offline retail via ofScale,” said Suvigna Shour, Co-founder & CEO, ofScale.

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With the infusion of fresh capital, the company intends to increase investment in product development. Shour said the company will use the funding to enable brands make data-based decisions while choosing relevant stores, and provide tools to take up initiatives to drive sales throughput.Shour added that offline distribution holds immense potential for D2C brands and the company also plans to implement more go-to-market (GTM) strategies to enhance the success of its partner brands. Currently, ofScale’s clientele includes direct-to-consumer (D2C) beauty and personal care brands like Bodywise, Deconstruct, Arata, Paradyes, Wishcare and Hair Originals.

The company envisions a bright future for offline distribution for D2C brands. “Offline will be an indispensable channel for D2C brands. Innovative distribution models will reduce offline entry barriers, and D2C brands will start venturing offline much earlier in their life. Our core capability will be to help brands launch offline by selecting the right retail stores based on data, cost-effectively and at speed. We intend to offer tools to brands on the platform to take up category-specific initiatives that will enable them to succeed and scale,” said Shour, adding that after beauty and personal care, the company will be looking at grocery and gourmet space too.

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