Bangalore based online grocery startup ZopNow has raised $10 Mn in a funding round led by San Francisco-based Dragoneer Investment Group, alongwith its existing investors including Accel Partners, Qualcomm Ventures and Times Internet also participating in the round. This round values the company at over $50 Mn.
According to the company, the funds raised in this round will be used for expansion into more cities. Mukesh Singh founder of ZopNow said that they will be expanding to over 15 cities and will further invest in technology and hiring.
Founded in 2011, ZopNow had pivoted from managing own inventory to sourcing supplies from supermarket chain HyperCity, six months back. Once an order is placed on the website, the company’s runner executives in the store picks/packs and delivers the goods in less than three hours to the customer. The company is further in talks with other offline retailers to implement a similar model. “Post grocery, this model also allows us to tie up with other retailers in apparel, footwear, electronics and other categories.” Mukesh Singh said.
The presence of numerous players in this segment has further added to the competition, players like BigBasket which operates its own warehouse and has raised more than INR 300 Cr. in the past eight months and is valued at INR 1,400 Cr. and Tiger Global backed Grofers uses its logistics network to deliver from the nearest shop have been trying to lead the grocery shopping in India.
Also various startups recently have grabbed funding in the grocery space including Sequoia-backed PepperTap and BCCL’S Springboard funded LocalBanya, FreshWorld, among others. Also, another grocery startup Ekstop was acquired by Godrej nature’s basket.
Earlier this month, Amazon launched KiranaNow in partnership with mom-and-pop stores. Flipkart, is also looking at entering groceries in the second half of the year.
According to India Brand Equity Foundation, food and grocery made up 69% of India’s $490 Bn retail sector in 2013. In another, survey conducted by AT Kearney, about 52% of the respondents in India had bought groceries online, while the global average is 42%.
ZopNow was founded by an alumnus of Massachusetts Institute of Technology and IIT-Kanpur, who had previously worked with companies like Zoesis, eGain Communications, Timeline Studios, Amazon India and MakeMyTrip, Mukesh Singh and Bal Krishn Birla, an IIT Kanpur alumni, who is no longer part of the company since 2013, in a blogpost he had claimed that he was wrongly ousted from the company.
ZopNow had raised an undisclosed amount in its first round of funding from Accel Partners, Qualcomm Ventures and media group Bennett Coleman & Co. in 2012.