Update: Earlier, the post wrongly mentioned $800 million which we have updated. We regret the error.
Online grocery platform Grofers is reportedly eyeing a fund infusion up to Rs 800 crore from Softbank and Tencent. The company is in discussions with aforementioned investors in an early phase, however, Softbank is planning to ramp up its stake in Grofers at 20-30 per cent lower valuation than its valuation during last financing round.
The Gurugram-based company was valued $400 million when it raised about $120 million from Softbank, the Russian entrepreneur and venture capitalist Yuri Milner along with existing investors in November 2015. The fresh fund infusion was first reported by TOI.
After a painful pivot from a marketplace to an inventory-led play in 2016, Grofers seems to have bounced back. With an exclusive interview with Entrackr, Albinder Dhindsa, co-founder, and CEO of Grofers had claimed that the company is registering a growth of 20 per cent on a monthly basis.
Turnaround story of Grofers
At the beginning of 2017, Grofers was doing little over 5,000 orders a day. Now, it processes 30,000 orders on a daily basis. The company also claims to have a top slot in Delhi (NCR) while its competitor Bigbasket has a lead in Bengaluru.
The major driver for Grofers to move from marketplace to an inventory-based model was broken supply chain. Media reports hinted that Grofers and Bigbasket were also exploring merger talks, however, the company vehemently denied such talks.
Unlike last year when the Tiger Global-backed company used to fulfil orders on bikes, the Softbank-backed company now uses a fleet of Tata Ace and vans to facilitate delivery. On bikes, a rider used to carry four orders maximum while vans allow it to fulfil approx 35 orders at one time.
Currently, the company has 23 warehouses, including seven in Delhi (NCR), one big facility in Bengaluru accompanied by two small ones. Mumbai and Kolkata have a big warehouse each.
The competition in the grocery segment is increasing. Apart from existing players Grofers, Bigbasket and Amazon Now, deep-pocketed horizontal players such as Flipkart and Paytm Mall have turned bullish about the segment. Flipkart had already launched grocery delivery service Supermart in Bengaluru November last year.
Paytm Mall along with Alibaba is slated to invest about $200 million in Bigbasket. Meanwhile, online classifieds major Quikr also entered the grocery space last year.