Milkbasket sees exit of investor EVC Ventures, ropes in Blume Ventures and LCIG
Gurgaon-based grocery delivery company ropes in Blume Ventures, LCIG to lead future growth; looks at expansion in scale.
When Milkbasket did its first delivery in March 2015, founders Anant Goel, Ashish Goel, Anurag Jain and Yatish Talvadia delivered milk to 22 houses using a personal car.
Having started with initial seed capital of Rs 50 lakh put together by Ashish and Anant from their personal savings, the founders received pre-series A funding of $500,000 led by EVC Ventures in April 2016, and another Rs 2 crore from individual investors in December 2016.
Two years on, the grocery delivery service has offered an exit to EVC Ventures and other seed angel investors as Blume Ventures and LCIG look to pick up stake.
The going so far has been anything but easy for the founders. With initial challenges coming from households wary to pre-pay for orders and having to answer questions like, ‘What if you run away with our money?’ today, the grocery delivery service serves over 115 societies in Gurgaon, taking on 5000 orders a day. Started with only delivering fresh milk, Milkbasket now delivers a range of grocery products and claims to have delivered 1.5 million orders to date.
Ashish and Anant were very clear from the very beginning when they decided to move back to India from the UK in 2012, that they wanted to start something on their own. Their picks were property management service or online grocery shopping. They initially started property management service Ursqft, which transformed to online classified portal Zamoona - a zero spam portal to buy, sell and rent properties in Delhi NCR. Zamoona, however, shut shop in January 2015.
“Meanwhile, owing to the busy days and all the evenings spent at work, we were facing a unique problem - taking out time for infrequent trips to nearby shops. No matter how many weekends and how much money we spent on monthly shopping, there was always something that you needed at home – needs that would just pop up randomly and impossible to plan. This was what laid the foundation of Milkbasket and the problem that we needed to solve,” says Anant.
The lessons learnt in the past venture became the guiding factors. Before jumping into an online grocery business, they were focused on what not to do. The questions to be addressed were: What are customer retention costs? What delivery costs are sustainable for Indian grocery industry? Why are all organised players reeling under losses while every nook and corner has a grocery shop, and they never shut down!?
Upon launch, the challenges included prospective customers not agreeable to pay in advance, finding vehicles on lease without guarantees, and vendors, having already burnt their hands with ecommerce, not ready to share data or give credit or a favourable return policy.
A setback came in the form of a few angel investors deciding against releasing an investment tranche. A team had been hired, asset advances were out, commitments were in place, vendor relationships were new – in short, it was too late to scale down.
“During this time, many people had approached us regarding funding but we never took it seriously. This time they were our only hope - and so we reached out to them. And they did what they said they would. Forty-five customers invested Rs 2 crore in Milkbasket, and led the round in which Hofan Capital, Empower Investments and Draphant also participated.”
The company employs around 200 people, and operates exclusively in select areas of Gurgaon. The company plans to expand aggressively in Gurgaon and deepen its penetration. With the latest funding, the aim is to service 50,000 orders daily in Gurgaon in the next 12-15 months.