SoftBank leads $200 mn round in e-grocer Grofers
Online grocer Grofers India Pvt. Ltd has raised more than $200 million (Rs 1,406 crore at current exchange rate) in a funding round led by previous investor SoftBank Group Corp., which is a Japanese conglomerate.
The firm, based in Singapore and Gurugram, stated that other previous investors Tiger Global Management and Sequoia Capital contributed to the round. Korea-based investment firm KTB Ventures came in as a new investor.
Founded in 1981, KTB, which claims to be the first venture capital firm from Korea, manages over $3 billion in venture capital and growth capital funds. The latest round will take the total funding raised by Grofers to nearly $430 million.
Scott Shleifer, partner at Tiger Global, said that Grofers will use the latest round of funding to expand into new markets, and build out its supply chain, among others.
Albinder Dhindsa, co-founder and CEO of Grofers, said that the investment will be utilised for expansion into three new cities.
The new round comes more than a year after Grofers had raised Rs 400 crore (around $62 million) in a Series E round led by SoftBank and joined by other previous investors Tiger Global and Apoletto Managers, which is a fund backed by Russian billionaire Yuri Milner. At the time of that announcement, the company had stated that the infusion had taken its total funding raised to $226.5 million.
Grofers, which was founded in 2013 by Dhindsa and Saurabh Kumar, grew rapidly and was one of the most heavily-funded grocery startups. However, the expansion took a toll on the firm, and in 2016, it exited nine cities, laid off employees and tweaked its business model to an inventory-led one. Currently, it operates in 13 cities.
The new round of funding also heats up the online grocery space where Bigbasket raised funding recently and Walmart and Amazon are ramping up their grocery operations.
Last week, Flipkart opened its fifth India physical grocery store in Mumbai.
Bigbasket, which is currently considered the market leader, operates in 10 large cities and 15 Tier-II cities. In an interaction with TechCircle around a year ago, Bigbasket co-founder Hari Menon had hinted at unmanned offline grocery stores, along the lines of Amazon Go in the US and Alibaba’s Hema store in China.
Meanwhile, Amazon is aggressively expanding its food retail business in India after overcoming regulatory hurdles. According to recent media reports, Amazon Retail India Pvt. Ltd (ARIPL) plans to take its operations to 60 more small cities in the country over the next year or so. ARIPL is currently present in 100 Tier-II and Tier-III cities.