Grocery and food delivery have become darling for heavyweight investors in India. BigBasket and Zomato collectively raised about $500 million led by Alibaba in February. Just within a week of the mega round in Zomato, anti-Alibaba brigade (Tencent and its investees) poured in $100 million into Swiggy, an arch-rival of the Deepinder Goyal-led company.
Now BigBasket competitor Grofers is in talks with SoftBank for raising $80-100 million fresh round. Notably, the Gurugram-based company hasn’t raised any capital for over two years. SoftBank had led $120 million round in Grofers in November 2015.
Meanwhile, Grofers will have to raise fresh funds this year to counter BigBasket. According to Entrackr’s sources, the e-grocer has about 8-10 months runway left from its previous round. However, to maintain a lead in Delhi (NCR) and fortify its reach in Bengaluru the company is scouting for a three digits funding cheque.
A Business Standard report mentions that company has also received a green signal from the government for foreign direct investment (FDI). Last July, the company also got the nod from DIPP for food retail in India.
Pivot in 2016 was painful for the online grocery platform as it shifted from marketplace to inventory-led play. The growth had taken a nosedive for Grofers from May till the February 2017. However, the company has bounced back since then and come a long way.
Straight from the CEO: Grofers painful pivot, regaining market share and Flipkart’s entry in grocery
Currently, it claims to do over 30,000 orders on a daily basis with monthly revenue of Rs 100 crore. So far, the company has raked-in $165 million from Tiger Global Management, SoftBank, Sequoia Capital and others.
At present, Grofers claims to have 30 percent market share of online grocery retail while Bigbasket commands over 50 percent market share.
Competition in the online grocery is going to intensify between BigBasket and Flipkart in Bengaluru while former continues to battle Grofers in Delhi, Bengaluru, and other several cities. Amazon is also testing out grocery through its pantry section and standalone app Amazon Now.
Besides Flipkart, Quikr and Paytm are also expected to start grocery soon.