Grofers narrows loss as net sales double in FY18
Gurugram-based online grocery startup Grofers India Pvt. Ltd pared its losses but saw its net sales or operating revenue surge for the financial year ended 31 March 2018, the firm’s filings with the Registrar of Companies show.
The firm’s losses for 2017-18 fell to Rs 258 crore from Rs 268 crore in the year-ago period, state the filings.
Its net sales stood at Rs 29.83 crore in 2017-18, up from Rs 13.23 crore in the year prior.
The company reported a negligible rise in total expenditure for 2017-18 at Rs 295 crore versus Rs 294 crore in the year prior.
According to Grofers' co-founder Saurabh Kumar, the firm has seen its revenue surge and its operating losses decrease. Its gross merchandise value has increased by 150% from 2016-17 to 2017-18, he added. “At Grofers, we are pleased with our year-on-year growth trajectory. With these economies of scale combined with robust growth prospects of the business, we are confident about strengthening this momentum as we continue to drive value for our consumers and the category’s evolution,” he said in a statement.
The venture, founded by Kumar and Albinder Dhindsa in 2013, allows users to order groceries, pet supplies, electronic products and more online.
Till date, the company has raised $226.5 million in total funding. Last March, it raised Rs 400 crore (around $62 million) in a Series E round led by existing investor Japanese Internet conglomerate SoftBank. Other existing investors US-based Tiger Global and Russian billionaire Yuri Milner's Apoletto Managers had also participated in the round.
Several media reports have stated that the company is currently in discussions to raise up to $150 million in fresh funding led by SoftBank’s Vision Fund.
The online grocer said it is currently clocking an average of over 40,000 orders a day with an order value of Rs 1,400. It claims to have turned operationally profitable in Delhi-NCR on a per-order basis.
The company was growing rapidly since it began its operations but the growth took a toll on the firm and in 2016, it shut operations in nine cities, laid off employees and tweaked its business model to an inventory led one.
Grofers competes with BigBasket, a well-funded player in the space. Last month, a media report had stated that the e-grocer was looking to raise up to $150 million (Rs 1,070.20 crore) from US-based CDC Group Plc and South Korean private equity firm Mirae Asset. The deal is expected to value BigBasket above $1 billion, making it the next potential unicorn.
For the financial year 2017-18, BigBasket saw the operating revenue for its wholesale business rise and its losses narrow.
Another player that Grofers competes with is food tech unicorn Swiggy. Last month, the firm said it is diversifying its operations by launching a new hyperlocal service that will offer home delivery of groceries and other daily essentials through its in-house app called Swiggy Store.
In December 2018, it raised $1 billion (just short of Rs 7,000 crore) in a Series H funding round led by South African technology conglomerate Naspers. China’s Tencent, Hillhouse Capital and Wellington Management Company had also put in money.