At a time when on-demand grocery startups are under severe scrutiny for positive unit economics and long term sustainability, subscription based micro delivery service startup Milkbasket has secured $500,000 in its pre-Series A funding from EVC Ventures; Zhu Dao Investments; Peter Zou, Partner Beam Capital VC and CEO of YeahMobi; Vikas Banga and Manav Kamboj of Snapdeal.
Last week, third largest on demand grocery startup Peppertap decided to shut operation because of poor unit economics and no sight of hitting profitability in long term. Milkbasket will deploy fund towards hiring core team and on technology. The company claims to have figured out positive unit economics within nine months of its operations.
Founded by Anant Goel, Ashish Goel, Anurag Jain and Yatish Talvadia in early 2015, Milkbasket is currently serving across 15 clusters in Gurgaon. Each cluster has a user base of around 500. Starting with only milk delivery, Milkbasket currently offers over 3000 plus products through a hybrid inventory model to maximize product margins while controlling costs.
When asked about MilkBasket’s post investment plans, CEO Anant Goel said,
We will use this fund to expand the core team, further enhance our technology and beef up the logistics. We are aiming for a 10x growth in customers in a span of next 4-5 months and increase per customer spend by 2.5 to 3 times during this time.
Not in hurry to branch out service to other cities, Gurgaon-based Milkbasket is focusing on getting hold first in the city. Over the next 6 months Milkbasket aims to grow to a 250 strong organization with 80% workforce in logistics and serving over 15,000 orders a day across 100 plus clusters in Gurgaon.
Commenting on EVC’s investment in Milkbasket, Anjli Jain adds,
Milkbasket represents the second generation of Indian e-commerce startups strongly educated by the mistakes of it’s large predecessors and relatives. The company has moved from covering one cluster to 15 with negligible marketing budget and got profitable from early stages. We are always in a look for committed founders who ride the wave of exuberance but keep a keen eye on the traditional postulates of unit economics.
It’s interesting to see investors faith in on-demand grocery startup when exuberance in the vertical has almost evaporated. Besides Peppertap that pooled in $51 million in risk capital, over half a dozen angel funded startups including Townrush and Localbanya had shut their shop. Experts opine that achieving positive unit economics is very difficult in on demand grocery where discount and lower price-points are only differeniator to drive scale. Milkbasket claims of hitting positive unit economics appear to be a lofty one but it could be true. Stay tuned for more updates from on demand grocery segment.