Infra.Market’s $100 million fundraising in February was striking for two reasons.
The five-year-old building materials supplier’s post-money valuation of $1 billion was a huge jump from the $170 million it was worth after its previous funding round in November. More importantly, Infra.Market has become the first unicorn in the dusty, unglamorous world of concrete and stone.
Backed by the imprimatur of renowned investors such as Accel and
Tiger Global’s Crazy Method
Infra.Market has found a way to get in on the action in India’s infrastructure sector.
Utilizing the spare capacity of approximately 300 construction goods manufacturers, Infra.Market serves as a one-stop-shop for infrastructure contractors looking for materials near their job sites. Moreover, it provides them under its own brand, making Infra.Market more than just a middleman.
This, combined with its decision to cater exclusively to the construction industry, has put it ahead of B2B peers like Zetwerk, Moglix, Industrybuying and OfBusiness.
Infra.Market, however, is not limited to the B2B space. Already, it is leveraging its own brand of cement, steel and granite, among others, to target homeowners through franchise-run retail stores in Tier II cities. “You have to be omnipresent. You can’t be a player that only caters to big infrastructure players,” says Accel Partner Prashanth Prakash.
Infra.Market currently has some 180 outlets, most of which are in the western state of Maharashtra. Freshly funded – the company has raised $144 million to date – the new unicorn plans to grow that number to 1,000 over the next 18 months, says co-founder Aaditya Sharda. Already, retail stores account for 20% of the company’s total revenue, with infrastructure projects accounting for the rest. The company’s goal is to achieve a 50/50 split, says Sharda, who launched Infra.Market with Souvik Sengupta in 2016.
But expanding its two businesses within and beyond the six states where it is operational will not be easy. For example, the biggest challenge with vertical infrastructure is that it has to be built one cluster at a time. “If you build a big business in Mumbai, on the supply side, it won’t benefit you in Kochi,” says Sumit Jain, senior partner at Sistema Asia Capital, an investor in Infra.Market. “It’s not rinse and repeat.”
On the retail front, national and regional brands are a dime a dozen. In every category it enters, for example, sanitary and electrical, Infra.Market needs to gain credibility from scratch and gain market share away from traditional brands.