DoorDash co-founder Tony Xu invests in an Indian retail tech platform Aarzooo

DoorDash co-founder and chief executive Tony Xu has made his first India investment in retail tech platform Arzooo. The platform has raised $70 million in a fresh funding round that also saw investments from leading global and Indian venture capital firms including SBI Investment (Japan) and Trifecta Leaders Fund. 

Existing Arzooo investors including Celesta Capital and 3 Lines VC also participated. Zoom founder Eric Yuan had also invested in the company in previous funding rounds.

Founded by ex-Flipkart colleagues Khushnud Khan and Rishi Rathore in 2018, Arzooo is building a platform for transforming offline retail by helping small retailers fight against e-commerce giants like Amazon and Flipkart.

Arzooo will utilise the latest funding to scale its technological might focusing on stores’ growth and market expansion for the platform as Arzooo continues to deepen its vertical play in the $65 billion consumer electronics market in India.

“We are pleased to welcome a new set of investors to the Arzooo rocketship with this round that was oversubscribed by 1.4X. While we truly appreciate the interest from the investor community, we are really glad to get on board some amazing set of people with a shared vision to transform offline retail,” Khushnud Khan, co-founder and CEO, of Arzooo, said.

Khushnud said that while the last decade had been about the proliferation of new-age economies, the internet was still seen as a rival to offline retail.

"Today, technology is making fast pace inroads into brick and mortar and we are excited to be at the forefront of this revolution while catalysing it by enabling the next generation of retail for lakhs of neighbourhood stores. Arzooo is essentially eliminating the barrier of size, scale, and capital for medium and small stores while democratizing retail in India,” he said.

Headquartered in Bengaluru, Arzooo is spread across 22 states and is powering over 30,000 retailers. The firm enables them to overcome broader limitations of physical retail while offering large inventories, best prices, and fast deliveries.

Yoshitaka Kitao, chairman and president of SBI Investment, said Arzooo’s business model is very capital efficient and can meet the increasingly diversified requirement of both retail shops and end customers.

"It is also great for them to have built a self-branded functional logistics system, which is one of the most important parts of the business. There is no limit to the company’s future and we would like to fully support the company on its way to great success,” Kitao said.

Lavanya Ashok, a partner at Trifecta Capital, also said the firm was excited to partner with Arzooo and scale India’s leading B2B platform for consumer durables and electronics.

"This is a large category of consumption that is ripe for disruption through the efforts of companies like Arzooo, especially in non-metro markets. The team has built this scalable platform in a very capital-efficient manner, and continues to add new use cases empowering retailers to address this rapidly growing market,” Ashok said.

DC advisory worked with Arzooo as an advisor on managing the transaction process for this round.