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Supercharging Brands

Eyeing $1 billion in revenue within the next five years, UpScalio emphasises profitability by enabling even small businesses to become successful household brands

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UpScalio runs on an e-commerce roll-up model wherein the company partners and acquires high potential brands that sell on marketplaces such as Amazon and Flipkart. It scales its revenue by 5-10X instead of building them from scratch. In the roll-up model, the company invests in various e-commerce brands, infuses working capital, brings on an expert team and provides consistent support in operations in order to scale the business further. 

Step by Step

After spending two years in his first job at Ernst & Young, London, Gautam Kshatriya decided to return to India to start in 2008, seeing an opportunity to help regular equity market investors. He then moved on to co-found Kshatriya Ventures, a seed-stage VC fund. After business school at Chicago Booth, he joined McKinsey & Co. and helped global companies grow revenue for five years.

When Kshatriya moved back to India, he was clear on the business model he wanted to attempt. With no capital, no colleagues, not even a pitch deck, UpScalio was born on March 16, 2021. Co-founders Nitin Agarwal and Saaim Khan quickly joined the venture, given their shared values and an opportunity to build a large business.

“UpScalio is an opportunity for me to help scale not just one, but multiple great brands and I can’t think of anything more exciting,” Kshatriya emphasises.

Riding the Wave

The idea of acquiring stakes in multiple companies has been around for a while. Private equity firms have been doing this since the 1940s. What led the trio to pursue the model was the immense potential in the e-commerce ecosystem in India.

E-commerce has been and continues to be a fast-evolving and dynamic business ecosystem in India. The first phase saw the emergence of marketplaces, followed by the second phase of digital-native brands emerging in fashion, consumer electronics and more recently, in the beauty and personal care segments.

Agarwal has worked with ShopClues for four years as the head of marketing and fuelled the growth from pre-Series A to the eighth unicorn in India. Moving on to Hotstar, he spent the next three years as its vice president of marketing.

Just after completing his stint with Purplle, he came across the e-commerce roll-up model, which struck a chord leading Agarwal to join the company as its co-founder and chief growth officer. “My focus is to help entrepreneurs win these customers and scale businesses multifold. I am sure it will unleash a new wave of entrepreneurs who more confidently start their journeys from the word go,” he says.

Within a few months of its launch, UpScalio has already acquired seven category-leading brands across utility categories and has clocked gross merchandise value annual run-rate of Rs 310 crore. Since there is no need for multiple accounting teams, IT platforms and offices, the company saves on operational expenses. 

Growth Plans

The enterprise aims to partner with 35 to 50 brands over the next few years. Each brand the company ties up with keeps a target to take revenues five times in two to three years. The levers for growth include digital marketing, channel expansion with going global on the agenda.

As far as the capital raising is concerned, the company has bagged a total of $42.5 million over two rounds. Leading investors include Presight Capital and an undisclosed hedge fund. Heliad Equity Partners, MPGI, 468 Capital and Whiteboard Capital also participated in the funding round.

The country is witnessing an e-retail boom, and a lot of promising brands are leveraging industry giants like Amazon and Flipkart to sell. UpScalio would provide a substantial fillip to these brands by creating wealth and growth prospects while also bolstering the larger
 e-commerce segment in India.

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magazine 12 March 2022 UpScalio