Grofers adds Rs 400 Cr feather to cap, gets Series E funding from SoftBank, Tiger Global
Online grocery store Grofers raised Rs 400 crore ($61.6 million) Series E funding led by Japan's SoftBank Group. Existing investors Tiger Global and Apolette Asia also participated in this round of funding. The total funding raised by Grofers now stands at $226.5 million.
Previously, the 2013-founded company had raised $166.5 million from SoftBank, Sequoia Capital and Tiger Global.
The fresh funds will enable Grofers to invest in building its private label and improve its supply chain. Also, a significant portion of this fund-raise will be used towards improving its infrastructure and technology. The team believes this will help it achieve deeper penetration in the cities that Grofers exists in.
From reports of its acquisition by BigBasket, to shutting operations in several Tier II and Tier III cities, Grofers has seen some tough times. Speaking of this, Albinder Dhindsa, co-founder and CEO, Grofers, said in a press statement:
"We took some hard decisions to fix parts of the business that were not scaling well. Our efforts have clearly contributed in making sure we have a clear path to profitability, as well as the largest market share in the online grocery segment, having grown four-fold in the last one year for monthly sales in excess of Rs 100 crore."
The online grocer currently claims to clock an average of 25,000 orders a day with an order value of Rs 1400.
Initially starting out on a hyperlocal model by delivering groceries procured from local stores within two hours of customers placing an order, Grofers has now moved to a scheduled next day (or even later) delivery model through its own warehouses – a model similar to competitor BigBasket.
Grofers' competitor and current market leader, BigBasket had raised $300 million funding led by Chinese e-tailer Alibaba in February this year. With this funding, BigBasket's valuation touches $950 million, just $50 million short of a unicorn status. In contrast with Grofers' $226.5 million, BigBasket has raised a total of $600 million.
Albinder is hopeful that this monetary endorsement of Grofers’ business proposition will help the company in building an enriched customer experience for its next ten million grocery shopping customers. "We are committed towards building a robust e-grocery market in India, and further contribute to the growth of Indian farmers and digital India," he said.
With Indian customers getting more familiar with online grocery shopping, the entirety of the market is expected to move up the curve and touch $1 billion by 2018, compared with $600 million in 2016.