Inside D2C grocery delivery startup Fraazo’s plans for geographical expansion

Direct-to-consumer (D2C) fresh groceries brand Fraazo recently raised $50 million in a funding round led by WestBridge Capital, along with Sixth Sense Ventures, Equanimity Investments, and Apar Group.

In a conversation with YourStory’s Daily Dispatch, Atul Kumar, CEO and Co-founder, Fraazo, said the startup will utilise the funds for geographical expansion across cities.

ALSO READ

This startup by two 19-year-old Stanford dropouts is disrupting the grocery delivery space

The startup aims to expand its presence in 15 Tier I and metro cities in the next 12-18 months. It will also use the capital raised for product development and the strengthening of supply chains. In terms of categorical expansion, the startup plans to add more categories to its basket.

Atul said the fresh groceries market is at a nascent stage and is a competitive one. However, for players like Fraazo, there is a lot of space for growth.

“The space is so vast that it can easily accommodate four or five players like us, and all of us can scale very fast,” he said.

According to Atul, quality and convenience are two important areas of focus as the startup intends to deliver fresh groceries within 30 minutes of ordering.

In fact, Fraazo is excelling on the pricing front as it directly sources from farmers and controls the supply chain, witnessing significant growth. “We have grown almost six times in the last six months,” he said. 

At present, Fraazo is catering to customers in Mumbai and Hyderabad. It had expanded to Hyderabad only a month ago.

“Idea is that whatever is the daily necessity for a customer in the kitchen, we should be able to provide them conveniently and cost-effectively,” he explained. 

The Mumbai-based startup aims to have distribution points not more than 2 km away from the customers in a city to keep up with its 30-minute delivery target.

It has 50 distribution points in Mumbai and over 25 distribution points in Hyderabad.

Initially, Fraazo started with a 90-minute delivery model. However, going forward, 30-minute delivery will be necessary to stay relevant in the grocery delivery market, Atul said. 

Especially for the fresh segment, Atul explained, it is important to control the entire supply chain to ensure top-notch quality. The startup has no plans to partner with other parties to keep inventory or to generate supply points from their stores.

“We will always maintain and control the inventory because that gives better experience on the customer side,” he said. 

In the next 12-18 months, Fraazo is targeting a 20x growth. It aims to achieve almost 10 million orders a month as well.

The startup is growing by almost 50 percent monthly and is on track to achieve its ambitious growth targets.