Evenflow Secures Funding for Ecommerce Brand Growth

Evenflow, an Indian e-commerce marketplace aggregator operating on a “Thrasio-style” model, has recently secured fresh capital as part of its ongoing Series A funding round, totalling $5 million (approximately INR 41 Cr). This follows a previous bridge funding round in October of the previous year. The latest funding brings Evenflow’s total funding to nearly $14 million since its inception in 2021.

Evenflow intends to utilise these funds to drive growth and enhance profitability across its multi-brand portfolio which includes Xtrim, Yogarise, Rusabl, BabyPro, Trendy Homes, Cinagro, and Frenchware.

Evenflow claims to have achieved a “350% growth” by focusing on distributing its brands across various online marketplaces and quick commerce platforms, including Amazon, Flipkart, CRED, Myntra, Blinkit, Instamart, Zepto, and Walmart.

However, the broader e-commerce aggregator market, while initially attracting significant investment and producing unicorns like Mensa Brands and GlobalBees, has seen a substantial decline in funding in recent years, partly influenced by the challenges faced by the US-based pioneer Thrasio.

Despite operating in a “low margin business,” co-founder and CEO Utsav Agarwal stated, “With scale, we are beginning to see backend synergies play out, with our downstream cost per unit reducing by the month and further flexibility to stress test the end customer pricing upwards or downwards – thus turning our big bets SKUs into a profitable engine.”

Evenflow distinguishes itself by claiming to be profitable in this challenging environment and has ambitious growth targets for the coming years. It aims for a tenfold increase in revenue and a sixfold rise in profitability in the next two years.

Evenflow’s brands are currently present in India, US and the MENA region. Utsav Agarwal highlighted the changing buying behaviour in India due to quick commerce, stating it’s “a unique opportunity for brands like ours to scale, and be available to be delivered within 10mins – something we are laser focussed on.”

The E-commerce Aggregator Market

Evenflow operates on a model similar to Thrasio, which involves acquiring and scaling third-party sellers on e-commerce marketplaces. It operates alongside other players in the Indian market, including Mensa Brands, GlobalBees, Upscalio, GOAT Brand Labs, and 10Club.

The roll-up e-commerce model initially gained traction from venture capital firms, with companies like Mensa Brands raising nearly $300 Mn and achieving unicorn status.

The sector has experienced a significant decline in funding after the initial hype. Funding dropped from $540 million in 2021 to $70 million in 2022, $78 million in 2023, and $39 million in the current financial year.

Some aggregators have faced difficulties in raising new funds, while others have shifted their focus. It took more than a year for Goat Brand Labs and GlobalBeez to secure new loans, while 10club has moved its focus to consumer brands.

The financial struggles of the US-based pioneer Thrasio, which was on the verge of bankruptcy until it just filed for Chapter 11, have likely impacted investor sentiment toward the model.

The D2C segment, where most roll-up brands operate, is currently valued at $12 Bn and expected to grow to $60 Bn by FY27, according to a report by Praxis. This indicates significant potential despite the challenges in the aggregator model itself.

Investor Confidence in Evenflow

Apoorva Ranjan Sharma, Co-founder of Venture Catalysts & 100Unicorns, noted, “Evenflow is one of the few companies that are profitable in this space. Their innovative approach and commitment to operational excellence continue to set them apart.”

Sunder Ramachandran believes Evenflow is “combining data, digital, and sharp execution to build consumer brands that last. Their focus and discipline give me confidence that they’re not just scaling fast, they’re scaling right.”

Venture Catalysts highlighted their continued support for Evenflow from the beginning.

Co-founder and CEO Utsav Agarwal has publicly stated the company’s aim to be “ready for an IPO by the end of 2027.”

However, the broader struggles within the e-commerce aggregator model, evidenced by declining funding and the difficulties faced by some prominent players, suggest that Evenflow will need to execute its growth strategy effectively to achieve its ambitious targets and potential IPO.