This Tiger Global-Backed Startup Aims To Become An End-To-End Construction Solutions Company The vendors' or manufacturers' underutilized capacity allows the Infra.Market to source products at a competitive price

Aaditya Sharda, founder of Infra.Market, has been an BIZ Experiences in the construction sector for the last ten years, running multiple experiments and pilots around creating a one-stop marketplace, starting with aggregates and RMC (ready-mix concrete).

In 2016, Sharda and co-founder Souvik Sengupta officially launched Infra.Market, a B2B marketplace for construction materials to bridge the gap between excess capacity at the manufacturer's end and demand.

"Take, for instance, the cement industry which is typically sitting on 40-50 per cent unutilized capacity at any given time. That is where we plug the gap. We try to use the excess capacity available with the vendor. Infra.Market undertakes the sales and marketing, quality assurance, fulfillment and logistics for this excess capacity. Additionally, it becomes a one-stop solution for multiple products sourced from manufacturing units or vendors," said Sharda.

The startup's latest funding round of $125 million from existing investor Tiger Global values the company at $2.5 billion. Tiger Global had in February led a $100 million funding round in the company, which also saw the participation of investors like Accel and Nexus Venture Partners, at a valuation of $1 billion. In February 2021, it raised a debt of INR 100 crore from Alteria Capital.

The Business Model

The startup claims to add value to the vendor or manufacturer because they were anyway sitting on a fixed cost, i.e unutilized capacity. "So, we came up with a proposal that you can produce what you want, I'm not going to touch your client base. But I have got a certain client base. So, you produce for me, private label it to Infra.Market and I'll pick up the product and take care of sales, fulfillment and collection," said Sengupta.

This, the startup says, improves the vendor's or manufacturer's capacity utilization and hence allows them to source the product at a very competitive price. The company caters to both institutional customers (B2B) and retail outlets (D2R) in the construction materials sector. The product categories the company offers include steel, cement, RMC, walling solutions, stone materials and flyash. Over the last year, the company has expanded its supply to retail outlets steadily.

Also, it has followed a dual model of opening flagship stores (for catering to smaller stores) and dealership stores (for retail customers). Recently the startup also acquired Equiphunt, a fully integrated equipment solutions platform for equipment ownership, maintenance and utilization. The startup competes with Moglix, Ofbusiness and Zetwerk in the space.

"As an BIZ Experiences, we have learned our way through various business models in the last few years across B2B, retail and private labels. We have taken bold bets from time to time, with a ruthless focus on execution with relentless discipline and the outcomes have been encouraging so far," added Sengupta.

Scott Shleifer, partner, Tiger Global Management, agrees. "We are delighted to double-down on our investment in Infra.Market. The team has demonstrated exceptional growth and continues to disrupt the construction materials industry. Over the past year, Infra.Market has become the go-to partner, especially during the pandemic when the traditional supply chains were disrupted," Shleifer told BIZ Experiences India.

Key Milestones

Here are the three milestones achieved by the startup so far, or in founders' words, "three memorable milestones':

• A chance meeting with Accel Partners leading to its first VC fundraise.
• Onboarding industry stalwarts and the right leadership team who would lead the next wave of growth, taking us to a decacorn level in years to come.
• Infra.Market's private label across majority of the product categories in the sector

"Our USP is our ruthless focus on customer centricity along with executional excellence. Everything from Infra Market's business model and approach, and the day-to-day execution of the model — is what helps us deliver extraordinary performance," said Sharda. Besides, the most successful products so far for the company have been cement, RMC, and construction chemicals.

Talking about the impact of the pandemic on the business, Sharda added, "The pandemic came with its own initial challenges, but we used this time to innovate and enter new businesses like retail and more private labels. We also built a strong team hiring aggressively including the best of industry leaders with vast experience".

The organization currently has 500-plus employees and claims to have people from varied skillsets and diverse backgrounds. "We are building an organization which is agile, drives a sense of ownership, inspires unconventional thinking, leading to accelerated individual and organization growth," said Sharda.

Road Ahead

With the new fundraise, the company will enhance its technological offerings, seed newer markets and advance their initiatives such as private label brands, direct to retail channels and exports. It is also keen to grow the business through acquisitions. The newly infused capital will be used to acquire mid-sized brands in the construction market.

Additionally, the company will aggressively hire business heads with proven expertise from the construction industry across product verticals like plumbing, paints and sanitary in the coming months. The company intends to increase its footprint across eastern and northern states such as West Bengal, Orissa and Uttar Pradesh.

"We are seeing huge growth in buyer wallet share as we are rapidly expanding our product portfolio and market presence and the launch of new verticals will help us fulfill our goal of creating a technology-backed end-to-end construction solutions company," said Sengupta.

Lastly, the founders leave us with what motivates them the most as BIZ Experiencess. "Creating a profitable business which outlives our lifetime and creates value for all our business partners (dealers, manufacturers) and employees and of course the challenge of disrupting one of the most critical sectors of the country, which is construction, via technology are the things that keep us going."

Factsheet

• Year launched: 2016
• Founders: Aaditya Sharda, Souvik Sengupta,
• Headquarters: Mumbai
• Total funding: $125 million
• Valuation: $2.5 billion
• Key investors: Tiger Global, Accel, Nexus Venture Partners, Alteria Capital
• Prominent partners: L&T, Tata Projects, ACC, Ultratech, Godrej properties
• Key infrastructure projects: Nagpur-Mumbai expressway, Gandhinagar and Ahmedabad metro, Polavaram irrigation