ofScale Raises $375,000 In Pre-Seed Funding To Pioneer Offline Distribution For D2C Brands; India’s Startup Inc. Registered A Positive Outlook This Week

The distribution-as-a-service startup ofScale has successfully secured $375,000 in its pre-seed funding round, with the next focus area being grocery and gourmet.

In this funding round, First Cheque, an early-stage venture capitalist, led the investment, joined by Matrix Partners India DeVC and Relentless VC.

Notable angel investors, including Abhishek Goyal, Mekin Maheshwari, and Revant Bhate, also participated.

Founded by Suvigna Shour, Tarun Kedia, and Vijay Akkaladevi in late 2022, ofScale aims to revolutionize the success of brands in physical retail spaces through its technology-led B2B model.

Currently assisting beauty and personal care brands in establishing affordable brick-and-mortar presences, the startup plans to expand into 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, which makes it necessary for brands to consider having an offline presence.

However, 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.

Suvigna Shour, Co-founder & CEO ofScale, emphasized the importance of offline expansion for direct-to-consumer (D2C) brands, stating that ofScale empowers brands to resourcefully pursue offline initiatives. Over the past year, more than 15 fast-growing beauty and personal care brands have launched offline retail with ofScale.

With the recently acquired funding, ofScale plans to increase investment in product development, aiding brands in making data-driven decisions for store selection and providing tools to drive sales throughput initiatives.

Shour highlighted the immense potential of offline distribution for D2C brands and outlined the company’s plans to implement go-to-market (GTM) strategies for partner brands’ success.

Currently, ofScale’s clientele includes D2C beauty and personal care brands such as Bodywise, Deconstruct, Arata, Paradyes, Wishcare, and Hair Originals.

Looking ahead, the company envisions a bright future for offline distribution in the D2C space, with plans to explore the grocery and gourmet sector after beauty and personal care.

Securing An Ace During ‘Funding Winter’
In the midst of an undeniably frosty winter for the Indian startup ecosystem, the news of ofScale securing $375,000 in pre-seed funding emerges as a heartening and much-needed source of warmth.

This funding triumph, led by First Cheque and backed by other prominent investors, provides a glimmer of hope and resilience, especially at a time when uncertainties loom large.

Showing the belief in novel ideas, even in the face of a challenging economic climate. ofScale’s mission to transform physical retail spaces through a technology-led B2B model is not just a venture; it’s a step towards redefining how brands manage the intricacies of offline expansion.

As the startup focuses on assisting beauty and personal care brands in establishing affordable brick-and-mortar presences, it not only addresses the challenges faced by these brands but also sets a precedent for others grappling with similar hurdles.

The Week In Overview
This week witnessed a significant surge in funding for Indian startups, with a collective sum of approximately $130 million raised by 20 ventures.

This includes four growth-stage deals and 14 early-stage funding deals, with details of two funding deals remaining undisclosed.

In the growth-stage category, four startups secured funding, with The Sleep Company, a sleep solution startup, leading the way with a substantial $22 million.

CoreEL, an aerospace and defense manufacturer, followed closely with $16 million.

Additionally, Biryani By Kilo, a cloud kitchen company, and Airblack, an online makeup and beauty learning platform, secured $9 million and $4 million, respectively.

Among the early-stage deals, Sarvam AI, a generative AI startup, took the lead by raising an impressive $41 million.

RDC Concrete, a construction goods and services platform, DGV, a dairy fintech startup, Navadhan, a rural-focused fintech startup, and Scimplifi, specializing in manufacturing specialty chemicals, also secured funding.

Notably, the funding trend for the week showcased a robust performance, surpassing the previous week’s figures by over 2X, totaling $130 million compared to approximately $63 million.

Bengaluru-based startups dominated the city-wise distribution with eight deals, followed by Delhi-NCR and Mumbai with 6 and 4 deals, respectively.

In terms of series-wise funding, the week saw pre-seed funding leading with five deals, followed by 4 seed, 3 Series A, and 2 Series C deals.

The funding sector also included pre-Series A, secondary, pre-Series B, grant, and angel funding rounds.

On the M&A front, ChrysCapital acquired a 75% stake in SaaS startup ProHance, while FMCG company BIA Brands and edtech firm Allen made acquisitions in the personal care and edtech sectors.

In fund-related news, IAN Alpha Fund closed its first round at Rs 355 crore, SenseAI Ventures launched a Rs 200 crore fund for India’s AI startup ecosystem, and Goodera Impact Innovator Fund introduced a fund worth $500k.

However, the week also saw some setbacks, with edtech startup Simplilearn and buy now pay later platform ZestMoney letting go of around 200 and 150 employees, respectively.

Additionally, Web3 startup Purple Pay and teen-centered neo-banking platform Akudo announced the impending shutdown of their operations.

The Last Bit, In the harsh economic winter currently enveloping Indian startups, ofScale’s funding success shines through, dispelling the cold shadows of uncertainty.

It sends a powerful message: innovation and determination still have a place in the sun, even in challenging times.

As ofScale looks forward to enhancing its capabilities and venturing into new sectors – even in the chilliest of seasons, the entrepreneurial spirit, startups can continue to thrive and innovate.