Gurugram-based online grocery startup Grofers has raised nearly $60 Mn in a fresh Series F funding round from Masayoshi Son-led SoftBank Vision Fund (SVF). This is reportedly the first tranche of the larger $120 Mn-$140 Mn funding round that is under works for Grofers.
A source close to the development confirmed the funding to Inc42. With the fresh funding, Grofers is now valued at $425 Mn post-money according to data intelligence platform paper.vc. Currently, SVF holds around 42% stake in the company.
Founded in 2013 by IIT graduates Albinder Dhindsa and Saurabh Kumar, Grofers offers products across categories such as grocery, fruits and vegetables, beauty and wellness, household care, baby care, pet care, bakery, and meats and seafood, among other things. It operates in 13 cities.
SoftBank had earlier led a $62Mn funding round in Grofers, acquiring 35-40% stake in the company in February.
The funding comes after reports surfaced in October 2018 that SoftBank may invest $140 Mn – $150 Mn (INR 1,027 Cr – INR 1,100 Cr) in the company with participation from German retail group Metro AG.
In the funding round, Grofers’ existing investors Sequoia and Tiger Global also invested $1.8 Mn and $19 Mn. SoftBank is further expected to invest $40 Mn in Grofers as it looks to close a deal with the new investor.
Grofers closed FY 2018 with $129.49 Mn (INR 950 Cr) in sales. It is now chasing a revenue target of $34 Mn (INR 2,500 Cr) and plans to roll out more than 500 stock keeping units (SKUs) for FY 2019.
Here’s a look at some of the recent activities at Grofers:
- Grofers recorded revenue of INR 310 Cr in January 2019 in lieu of its sale season
- Grofers has stopped offering fresh products as it is concentrating its energy on private labels — Budget and Popular G-Brands
- It has expanded its private labels to offer 250 food and non-food products to its consumers
- It is targeting a stronger growth trajectory in 2019, with a 50% contribution from its private brands
- Grofers has changed its focus to establishing its foothold in Delhi-NCR by investing in its supply chain and technology
- The company claims to be profitable in Delhi on a per-order basis
Online grocery sector is expected to almost quadruple over the next three years to touch $1.38 Bn (INR 100 Bn) in terms of revenue. A Goldman Sachs report forecast that the Indian online grocery market is set to reach $40 Mn (INR 270 Cr) by FY19, growing at a CAGR of 62% from 2016 to 2022.
The sector, which has seen with high-investor attraction from the likes of SoftBank, Tencent, Temasek, etc, has been struggling for growth and to manage high rates of cash burn.