Why Kalaari Capital found value and invested in micro-delivery platform Milkbasket


Despite a crowded market it finds itself in, Milkbasket has managed to stand out and capture investors’ attention. Read on to know why.


At Kalaari Capital we are very excited to have invested in Milkbasket — partnering with founding team Anant Goel, Ashish Goel, Anurag Jain, and Yatish Talvadia. Their journey towards building a great household brand for grocery shopping in India is exciting to us and we hope to foster a long-term relationship with Milkbasket and see this goal come to light.

Overview of the problem & market opportunity

Why invest in grocery shopping now? Isn’t it a competitive market with BigBasket, Amazon, Flipkart, and everybody else already ahead in the game? We asked ourselves these questions many times when we first started engaging with the Milkbasket team. But, a deeper look at the market still made it an exciting opportunity.

Food & Grocery is a $300-billion segment in India and is expected to grow to $1 trillion by 2030. About 98 percent of this consumption today is serviced by the fragmented general trade channel or the 11 million kirana stores in India. While the industry may seem overcrowded, the existing new-generation models are only scratching the surface. It’s still unclear what a uniquely Indian retailing model potentially serving 100 million+ households will look like. There is still a lot of evolution ahead for this industry.

A large, evolving market like this is bound to be competitive but at the same time, it provides opportunities for new entrants. Through our interaction over last six months with Milkbasket, we were able to understand the uniqueness of their model and why customers love them.

Our investment thesis

The founding team at Milkbasket has more than 40 years of experience in supply chain, strategy, retail and technology roles in large multinational companies and startups. It brings together a blend of agile thinking and successful execution, which we think is key to building a business like this.

Milkbasket is India’s first e-commerce app without a checkout or ‘Buy’ button. Their users simply add whatever they want — next day groceries, fruit, milk, etc. — until midnight every day, and find it delivered at their doorstep the next morning.

This enables Milkbasket to capture both planned and unplanned purchases of a household, which conventional grocery e-commerce models find harder to. The model allows for very high repeat purchases and frequency. On an average, Milkbasket customer cohorts display repeat percentages north of 95 percent (see image below). A household places more than 20 orders with them in a given month, making Milkbasket a part of everyday life.

While it appeared easy on the surface, there is a strong supply chain rigour that the company undertakes every day. The delivery operations take place only in the morning — between 4 am and 7 am. High concentration of orders allows a deliveryman to deliver more than 50 orders in two hours’ time. This ensures that whatever customers order until midnight is lying outside their door next morning, even if it happens to be a Rs 5 pack of Parle-G biscuits.

From using data to predict inventory, innovative processes to manage the fulfillment centre space for perishable and non-perishable categories, and picking & packing of an order past midnight, a number of things make Milkbasket supply chain more unique and cost-effective than any we have seen.

Overall, we were impressed by a strong founding team, their focus on data-based decision making, operational rigour, and a persistent focus on customer delight, backed by a large market opportunity in the grocery space. This culminated into us leading a $7-million Series-A round into the firm. We are very thrilled to work with their team in building a great household name together. They currently operate in NCR and you will soon find them coming to your city.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)


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