Grofers claims that it is going to become the largest online grocery store in the Indian market by the end of this quarter, i.e. June 30, 2019.
The funding aspect of this aspiration is being taken care of by SoftBank Vision Fund. The $100 billion fund is leading a $200 million round in the Albinder Dhindsa led company. Of the total, $60 million has already been invested in February this year, and there is more to come.
Apart from the Masayoshi Son led conglomerate, that is already an investor in the firm, other existing investors such as Tiger Global and Sequoia Capital are also contributing to spur this growth. A new investor that is coming on board is KTB, as per Bloomberg reports.
Earlier, when the firm had received the $60 million investment from Son, it as being expected that this round will go up to $120-140 million. However, it seems that Dhindsa added $60-80 million more to this target to achieve that coveted tag of a Unicorn startup with a $1 billion valuation. This is quite ambitious considering that at the time of $60 million funding the company was being valued at $425 million only. The $600 million leap will require a large spike in valuation during due diligence by these investors.
Right now, the largest online grocer is BigBasket, that achieved this Unicorn status with the latest $150 million funding led by Alibaba, SoftBank’s own portfolio. To surpass that valuation and become the top grocer, Grofers had to raise more funds, and Son and others obliged.
Online grocery is a $600 million industry with the YoY growth rate of 55% till 2021 and Grofers doesn’t seem to be in a mood to fight lousy for the top position. It claims a $400 million top line and 8X growth in last two years. Looking at the last fiscal’s financial reports this isn’t close to being the revenue, so it must be GMV.
It further claims that out of its 13 cities it is already profitable in Delhi and is on its way to being profitable in Kolkata. True or not, the claims and company ambitions are something to be closely inspected in the upcoming timeline. A lot will depend on the company’s FY19 performance.
Update: The headline has been updated to reflect that Grofers is not a unicorn yet, despite contradicting reports circulating on the internet. The confirmation is given by the company spokesperson regarding the same.