Grofers gets $62 mn from SoftBank, others at lower valuation
Gurgaon-based online grocery startup Grofers India Pvt. Ltd has raised Rs 400 crore (around $62 million) in a Series E round led by existing investor Japanese Internet conglomerate SoftBank.
The company said in a statement that existing investors US-based Tiger Global and Russian billionaire Yuri Milner's Apoletto Managers also participated in the round. The current deal takes the total funds raised by Grofers to $226.5 million, the statement added.
The investment saw Grofers’ valuation fall by 20% to $300 million as compared to what it was valued at during its last fundraise in November 2015, according to a Times of India report.
The online grocer will use the funds to develop its private labels, build its infrastructure and technology, and improve its supply chain in order to penetrate further into existing markets, the press note stated.
"We took some hard decisions to fix parts of the business that were not scaling well. [We have] grown four-fold in the last one year [as] monthly sales [stand] in excess of Rs100 crore,” co-founder Albinder Dhindsa said in the statement.
The online grocer said that it is currently clocking an average of 25,000 orders a day with an order value of Rs 1,400. It claims to have turned operationally profitable in Delhi-NCR on a per-order basis, the statement added.
Grofers last raised money in November 2015 in a round led by SoftBank. Existing investors Apoletto Managers, Tiger Global, and Sequoia Capital also participated then. The quantum of funds raised at that time was $120 million (Rs 780 crore).
Grofers' revenue for the year through March 2016 had fallen 32% to Rs 58.34 lakh from Rs 86.38 lakh in the previous financial year.
Net loss widened 15 times to Rs 60.87 crore from Rs 3.9 crore. Total expenses surged to Rs 61.45 crore from Rs 4.77 crore. The company’s financial statement for 2016-17 is not currently available.
Grofers was founded by Saurabh Kumar and Dhindsa in 2013.
In January 2016, it shut its operations in nine cities as it didn't see any traction despite running costly marketing campaigns. It even pivoted its business model to an inventory-led one.
Six months later, in June 2016, Grofers laid off some employees and revoked campus job offers as part of operational restructuring.
In an interaction with TechCircle in December 2017, co-founder Dhindsa said that the company is targeting middle-class customers and helping smaller brands reach more consumers through data analytics. The online grocer also works with small brands and has launched private labels in partnership with them, Dhindsa said.
He also added that Grofers is closing the growth gap with BigBasket. “While they are doing Rs 120 crore a month, we see ourselves getting to Rs 100 crore a month by March. We see a clear differentiation as we are strong in the northern region and they are strong in the southern region,” he explained.