Mar 20, 2025

As Internet penetration deepens across rural India, consumerism in these regions is surging, drawing the attention of startups and venture capitalists eager to tap into this expanding From online marketplaces and direct-to-consumer (D2C) brands to logistics providers and retail software-as-a-service (SaaS) platforms, a growing number of companies are targeting rural commerce as the next big growth frontier. New and innovative business models have emerged to cater to the distinct needs of rural India. One such approach is assisted e-commerce, where local entrepreneurs, known as “Hesaathis,” help villagers order products online, bridging the digital divide. “This model makes online shopping accessible to those unfamiliar with technology,” said Somdutta Singh, founder and CEO of Assiduus Global and investor at Karma Holdings. Venture capitalists have taken note of the opportunity. This month, rural commerce startup Rozana secured $22.5 million in a funding round led by Bertelsmann India Investments (BII), with participation from Fireside Ventures and existing investors, including 3one4 Capital. The company relies on a peer-to-peer network of over 18,000 village-based partners to ensure last-mile delivery to more than 400,000 households across 4,000-5,000 gram panchayats in rural Uttar Pradesh and Haryana. B2B rural e-commerce has also been gaining traction among investors. Prosus and SoftBank-backed ElasticRun is a notable player, helping fast-moving consumer goods ( ) brands expand distribution in rural areas while also offering third-party logistics services. The Pune-based company became a unicorn in 2022 after raising $300 million. Meanwhile, fresh produce and grocery delivery startup Wheelocity raised $15 million in November 2024 in a Series A2 funding round led by Lightspeed. The Chennai-based company recently pivoted from a B2B supply chain business to an e-commerce platform targeting rural and semi-urban India, highlighting the growing demand in these areas. VilCart, another rural commerce startup, is revolutionising rural kirana stores by connecting them with brands, farmer producer organisations, and small rural manufacturers. The company reported revenue of Rs 1,200 crore in FY25, marking a 26% growth from Rs 838 crore in FY24. “We anticipate closing FY26 at Rs 1,600 crore, a 25% increase,” said VilCart founder and CEO Prasanna Kumar. The startup, which began in Karnataka in 2018, now covers 16% of South India's rural population, reaching 100,000 kirana stores across 30,000 villages. In February, it raised $10 million in a bridge funding round led by AI-X BV, Spark Capital, and existing investors Nabventures. Leading e-commerce platforms like , and Meesho are also turning their attention to rural India, driven by strong demand. During Flipkart's last ‘The Big Billion Days' sale, its value-commerce platform Shopsy recorded a spike in orders from tier-4 towns. Amazon recently launched a delivery service in Uttarakhand's remote villages, reaching altitudes of 4,500 feet. Meanwhile, Meesho saw a 35% increase in orders in 2024, with half of its 175 million users now coming from tier-4 towns and villages. Quick commerce startup Zippee is also experiencing a surge in rural orders. The company has reported a steady quarter-on-quarter increase in rural order fulfillment, with rural orders now contributing a single-digit percentage to its total revenue, up from zero a year ago. The firm expects this share to reach double digits within the next 13 months, particularly in aspirational categories like beauty and personal care. Efforts to improve logistics have further propelled rural commerce. Shiprocket, a logistics unicorn, has partnered with ONDC and India Post to support sellers in rural areas, leveraging India Post's vast network to facilitate e-commerce exports. Currently, over 30% of Shiprocket's revenue originates from non-metro cities, including tier-4 towns. “The widespread adoption of UPI has made transactions seamless and secure, encouraging more rural consumers to shop online. Additionally, improvements in logistics and supply chains have made it feasible to serve remote locations,” said Singh.