Two-thirds of US Main Street Businesses are Bullish on 2022 Sales

Despite the damage, disappointment and disruption caused by the latest surge of COVID-19, Main Street business owners in the United States look forward to the year ahead and hold out hope that it will bring better luck.

According to The Main Street Index, a PYMNTS and Melio collaboration that surveyed 765 U.S. business owners, approximately two-thirds of Main Street business owners expect solid sales growth in 2022, although they also worry about inflation and economic uncertainty.

As 2021 ended, 53% of Main Street business owners expected their 2021 sales to show an increase. Looking ahead to the new year, 64% of them were optimistic that the economic recovery that took hold in 2021 would continue gathering momentum in 2022.

Just 26% of businesses expected their revenue to be unchanged in 2022, and 10% anticipate a decrease.

Despite the overall bullish outlook among many companies, about half of Main Street businesses say inflation and economic uncertainty are key business challenges.

Worries about inflation and economic uncertainty are more pronounced among businesses that are not entirely online — those that sell primarily through their storefronts and those that rely on an even mix of online and physical sales.

Inflation is a challenge expected by 60% of businesses that sell primarily in physical stores and 59% of those with an even share, but only 49% of those that sell primarily online.

Similarly, uncertainty about economic conditions is a challenge expected by 59% of those that sell primarily in physical stores and 59% of those with an even share of online and physical sales, but only 42% of those that sell primarily online.

Inflation is the challenge that represents the biggest threat to Main Street businesses’ survival. Among businesses that fear that their survival is threatened, 65% say the biggest threat to their survival is increasing costs. That is the problem most cited by Main Street businesses that think they will not survive.

ElasticRun, a kirana commerce platform helping businesses connect with rural India, is expecting to raise $300 million in a funding round led by SoftBank, according to a report Wednesday (Jan. 19) from The Times of India.

Three sources told the news outlet that SoftBank is set to invest around $200 million, with the additional funding coming, in part, from Goldman Sachs and existing investor Prosus. The company’s valuation could be over $1 billion in that case.

ElasticRun was founded in 2016 by Sandeep Deshmukh, Shitiz Bansal and Saurabh Nigam. The company works as an extended arm of the fast-moving consumer goods (FMCG) companies’ distribution reach.

According to the company, out of the 12 million kirana stores in India, traditional distribution networks reach around 2 million. ElasticRun uses data from kirana stores to predict demand, helping companies cut down costs and reach more customers.

In April of last year, ElasticRun was valued at $400 million. At that time, it was able to raise $75 million.

Earlier this month, PYMNTS reported that SoftBank had invested $146 million into South Korean artificial intelligence (AI) firm Qraft, with objectives of helping it expand into the U.S.

Qraft reportedly manages $1.7 billion for Asian banks and insurance providers through a lineup of funds traded in the U.S. The companies didn’t disclose Qraft’s valuation.

The company has 50 employees and most of them work on the company’s AI project. Employees own around a third of the business, and outside investors control the rest. According to U.S. CEO Robert Nestor, SoftBank now makes up a huge portion of that.

The Wall Street Journal reported that asset managers used to be skeptical about AI, but they’re hoping data analysis tools can help justify things. Qraft has reportedly been on SoftBank’s radars since around 2020, at which time the firm had considered it for a Vision Fund investment.