Prosus-backed ElasticRun's quick commerce wing is bringing speed to FMCG, grocery deliveries in small towns
In FY25, ElasticRun narrowed its net loss to ₹145 crore from ₹360 crore in the previous year, helped by improved efficiencies in logistics and focus on regional brands.
BENGALURU: ElasticRun, which enables FMCG and grocery companies to reach the remotest parts of the country, is doubling down on its newly established quick commerce vertical, positioning it as the primary engine for growth in FY26.
The B2B e-commerce unicorn is expanding its network of dark stores, aiming to offer two-to-four-hour deliveries in tier-2 and tier-3 towns, effectively bridging the gap between high-speed urban fulfillment and its traditional rural reach, founder and chief executive officer Sandeep Deshmukh told Mint.
“The emergence of quick commerce defined 2025 for us. Brands realized the correlation between speed of deliveries and customer experience and focused on rewriting their supply chains. We decided to focus on building last-mile capacities for these brands," Deshmukh said in an interview.
The Pune-based company sees potential in this arm to account for 40-50% of its overall shipment volume by the end of next year, up from its current single-digit share, according to Deshmukh.
This strategy shift comes as quick commerce transcends from a mere convenience to become a critical distribution channel for merchants. For many companies, ‘instant gratification’ is no longer just a consumer demand but a competitive necessity to capture households willing to pay a premium for speed. By integrating rapid delivery, ElasticRun enables merchants to capitalize on impulse-driven, high-margin categories like food and home essentials, Deshmukh said.
Over the past two years, ElasticRun has implemented strategy changes to drive better unit economics in a tough macroeconomic landscape. It moved away from large national brands to regional consumer brands to build volume. Now, the company is working on improving adoption of its private labels, especially in tier-2 cities, where consumers are increasingly experimental.
Higher margins
“Our private brands are effective where large gaps in certain regions exist. A large part of the introduction of private brands was done last year itself. This year, we focused on deeper penetration of the existing portfolios," Deshmukh noted. Private brands can command margins up to 25%, compared to 5% for other regional brands, improving revenue prospects, according to the executive.
Founded in 2016 by Deshmukh, Shitiz Bansal and Saurabh Nigam, ElasticRun supports FMCG and grocery companies with larger scale and a wider audience. It assists a host of clients including food, general merchandise and pharma companies to reach rural consumers through its nationwide network of over 900 warehouses and 50,000 on-ground partners.
It also enables banking institutions to extend financial services to consumers beyond urban geographies. Its key partners include Unibic, Lahori Zeera, CavinKare, and Bambino.
“Faster deliveries mean that the B2B customers can keep lower inventories at their end. This will make them more capital efficient, akin to how just-in-time revolutionized the automobile industry," Madhur Singhal, managing partner (consumer and internet) at global consulting firm Praxis Global Alliance. However, such firms will need to maintain robust and standardized item masters and work on lowering manpower and vehicle-running costs to keep overall expenses in control, said Singhal.
Market opportunity
Business-to-business marketplaces that are online-first and technology-enabled are expected to represent a market opportunity of $200 billion by 2030 from $20 billion in 2022, according to estimates by Bessemer Venture Partners.
ElasticRun’s operating revenue grew 10% year-on-year to ₹2,653 crore in FY25, while narrowing net losses to ₹145 crore from ₹360 crore in the previous year. Deshmukh said increased efficiencies in logistics and focus on regional brands helped contain losses.
The current financial year is expected to take ElasticRun closer to profitability with quick commerce at the core of its strategy.
The company secured $330 million from SoftBank, Prosus and Goldman Sachs, among others, at a valuation of $1.5 billion, in February 2022.
“We have enough cash in the books, so fundraising isn’t a priority. We are just about a year away from delivering our best financial numbers since inception," Deshmukh noted.
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