Online marketplace for local grocery delivery Grofers raises $35M in Series B round
Locodel Solutions Pvt. Ltd, which runs hyper-local grocery and fresh food delivery platform Grofers, has raised $35 million (Rs 218 crore) from its existing investors Tiger Global Management and Sequoia Capital, the company said on Wednesday.
Its second round of funding comes just two months after it closed a Series A fundraise worth $10 million from Tiger Global and Sequoia. The startup had previously raised seed funding from Sequoia and Deepinder Goyal, co-founder and CEO of Zomato.
Separate media reports, citing sources, pegged Grofer's valuation in the new funding round in the $110-115 million range.
The company said it will use the funds to add products in addition to expanding services to more cities.
Founded by Saurabh Kumar and Albinder Dhindsa, Grofers allows users to order products ranging from grocery to pet supplies and baby care products online and enables delivery within 90 minutes. It allows consumers order products available at brick and mortar stores through the Grofers mobile app.
The smartphone-based grocery delivery platform currently partners with more than 400 merchants in Bangalore, Delhi-NCR and Mumbai. It expects to start delivering products in Hyderabad and Pune by next month. Grofers claims to have witnessed a sharp increase in the number of orders and expects to execute over 20,000 orders this month.
"The additional infusion of funds will allow us to penetrate deeper into groceries and add new consumables categories as well. We will continue to invest in expansion to new cities with this round of funding," said Dhindsa, co-founder and chief executive of Grofers.
"Grofers offers a unique, local logistics service that benefits small businesses and their customers, and we're excited to support the company's rapid growth," said Lee Fixel, partner at Tiger Global.
Last week, Grofers had acquired mobile-only grocery startup Mygreenbox Retail Pvt Ltd, which ran a similar venture in Gurgaon, for an undisclosed amount.
According to consultancy firm Technopak, the food and grocery retail business constituted about $370 billion of the overall $530 billion retail (merchandise) spending during 2014-15.
However, it noted that e-tailers globally have struggled to develop a successful business model for food and grocery, which, according to a 2012 research report, constituted a mere 2 per cent of e-commerce in a mature market like the US. In India too, the consultancy believes, e-commerce would be driven by non-food categories.
While some Indian e-grocers like BigBasket and ZopNow are doing end-to-end business like an e-tailer, others like PepperTap (which has also just raised $10 million in a new funding round) is essentially enabling local pick-ups and drops from neighbourhood stores.
Amazon also joined hands with kirana shops to link consumers with local grocers through its online marketplace starting with Bangalore.
(Edited by Joby Puthuparampil Johnson)